General Communication Inc. Annual Report 2014

Plain-text annual report

Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014 or o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-15279 GENERAL COMMUNICATION, INC. (Exact name of registrant as specified in its charter) State of Alaska 92-0072737 (State or other jurisdiction ofincorporation or organization) (I.R.S EmployerIdentification No.) 2550 Denali StreetSuite 1000Anchorage, Alaska 99503 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (907) 868-5600Securities registered pursuant to Section 12(b) of the Act: Class A common stockSecurities registered pursuant to Section 12(g) of the Act: Class B common stockIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes o No ý Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act. Yes o No ý Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes ý No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (orfor such shorter period that the registrant was required to submit and post such files).Yes ý No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (section 229.405 of this chapter) is not containedherein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference inPart III of this Form 10-K or any amendment to this Form 10-K. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reportingcompany. See the definitions of “large accelerated filer,” "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.Large accelerated filer oAccelerated filer xNon-accelerated filer o (Do not check if a smaller reporting company)Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ýThe aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the average high and low pricesof such stock as of the close of trading as of the last business day of the registrant’s most recently completed second fiscal quarter of June 30,2014 was $206,250,223. Shares of voting stock held by each officer and director and by each person who owns 5% or more of the outstandingvoting stock (as publicly reported by such persons pursuant to Section 13 and Section 16 of the Exchange Act) have been excluded in that suchpersons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.The number of shares outstanding of the registrant’s common stock as of March 2, 2015, was: Class A common stock – 38,524,000 shares; andClass B common stock – 3,159,000 shares.1Table of ContentsGENERAL COMMUNICATION, INC.2014 ANNUAL REPORT ON FORM 10-KTABLE OF CONTENTS Page No. Cautionary Statement Regarding Forward-Looking Statements3 Part I Item 1.Business3 Item 1A.Risk Factors15 Item 1B.Unresolved Staff Comments25 Item 2.Properties25 Item 3.Legal Proceedings26 Item 4.Mine Safety Disclosures26 Part II Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities26 Item 6.Selected Financial Data30 Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations30 Item 7A.Quantitative and Qualitative Disclosures About Market Risk44 Item 8.Consolidated Financial Statements and Supplementary Data44 Item 9.Changes In and Disagreements With Accountants on Accounting and Financial Disclosure44 Item 9A.Controls and Procedures44 Item 9B.Other Information46 Part III Item 10.Directors, Executive Officers and Corporate Governance47 Item 11.Executive Compensation52 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters71 Item 13.Certain Relationships and Related Transactions, and Director Independence74 Item 14.Principal Accountant Fees and Services76 Part IV Item 15.Exhibits, Consolidated Financial Statement Schedules78 SIGNATURES 1292Table of ContentsCautionary Statement Regarding Forward-Looking StatementsYou should carefully review the information contained in this Annual Report, but should particularly consider any risk factors that we set forth inthis Annual Report and in other reports or documents that we file from time to time with the Securities and Exchange Commission (“SEC”). In thisAnnual Report, in addition to historical information, we state our future strategies, plans, objectives or goals and our beliefs of future events and ofour future operating results, financial position and cash flows. In some cases, you can identify those so-called “forward-looking statements” bywords such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “project,” or “continue” or thenegative of those words and other comparable words. All forward-looking statements involve known and unknown risks, uncertainties and otherimportant factors that may cause our actual results, performance, achievements, plans and objectives to differ materially from any future results,performance, achievements, plans and objectives expressed or implied by these forward-looking statements. In evaluating those statements, youshould specifically consider various factors, including those identified under “Risk Factors,” and elsewhere in this Annual Report. Those factorsmay cause our actual results to differ materially from any of our forward-looking statements. For these forward-looking statements, we claim theprotection of the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995.You should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement, and the related risks,uncertainties and other factors speak only as of the date on which they were originally made and we expressly disclaim any obligation orundertaking to update or revise any forward-looking statement to reflect any change in our expectations with regard to these statements or anyother change in events, conditions or circumstances on which any such statement is based. New factors emerge from time to time, and it is notpossible for us to predict what factors will arise or when. In addition, we cannot assess the impact of each factor on our business or the extent towhich any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.Part IItem 1. Business GeneralIn this Annual Report, “we,” “us,” “our,” "GCI" and “the Company” refer to General Communication, Inc. and its direct and indirect subsidiaries.GCI was incorporated in 1979 under the laws of the State of Alaska and has its principal executive offices at 2550 Denali Street, Suite 1000,Anchorage, AK 99503-2781 (telephone number 907-868-5600).GCI is primarily a holding company and together with its direct and indirect subsidiaries, is a diversified communications provider with operationsprimarily in the State of Alaska.Availability of Reports and Other InformationOur Internet website address is www.gci.com. The information on our website is not incorporated by reference in this annual report on Form 10-K.We make available, free of charge, access to our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,Proxy Statement on Schedule 14A and amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities andExchange Act of 1934 as soon as reasonably practicable after we electronically submit such material to the SEC.Financial Information about Industry SegmentsFor financial information about our two reportable segments - Wireless and Wireline, see “Part II — Item 7 — Management’s Discussion andAnalysis of Financial Condition and Results of Operations.” Also refer to note 10 included in “Part II — Item 8 — Consolidated FinancialStatements and Supplementary Data.”Narrative Description of our Business 3Table of ContentsGeneralWe are the largest Alaska-based communications provider as measured by revenues. We offer facilities-based wireless telephone services, dataservices, Internet access, video services and voice services, to residential and business customers across the state under our GCI brand. Due tothe unique nature of the markets we serve, including harsh winter weather and remote geographies, our customers rely extensively on our systemsto meet their communication and entertainment needs.Since our founding in 1979 as a competitive long distance provider, we have consistently expanded our product portfolio and facilities to becomethe leading integrated communication services provider in our markets. Our facilities include redundant and geographically diverse digital underseafiber optic cable systems linking our Alaska terrestrial networks to the networks of other carriers in the lower 48 contiguous states. In recentyears, we expanded our efforts in wireless and presently operate the only statewide wireless network. For the year ended December 31, 2014, we generated consolidated revenues of $910.2 million. We ended the period with 149,600 wirelesssubscribers, 133,200 cable modem subscribers and 135,400 basic video subscribers.Development of our Business During the Past Fiscal YearAgreement to Purchase Alaska Communications System Group, Inc.'s Wireless Subscriber Base and Its Interest in The Alaska WirelessNetwork. On December 4, 2014, we entered into an agreement with Alaska Communications Systems Group, Inc. ("ACS") to purchase itswireless subscriber base and its one-third ownership interest in The Alaska Wireless Network, LLC ("AWN") for $293.2 million, subject to possiblepost-closing adjustments ("Wireless Acquisition"). On February 2, 2015, we completed the Wireless Acquisition in which AWN became our whollyowned subsidiary and we will be entitled to 100% of the future cash flows from AWN. We funded the purchase with a $275.0 million Term B Loanunder our Senior Credit Facility and a $75.0 million unsecured promissory note to Searchlight ALX, L.P. ("Searchlight"). See notes 6 and 15included in "Part II - Item 8 - Consolidated Financial Statements and Supplementary Data."You should see “Part I — Item 1. Business — Regulation” for regulatory developments.Business StrategyWe intend to continue to increase revenues using the following strategies:Offer Bundled Products. We believe that bundling our services significantly improves customer retention, increases revenue per customer andreduces customer acquisition expenses. Our experience indicates that our bundled customers are significantly less likely to churn, and weexperience less price erosion when we effectively combine our offerings. Bundling improves our top line revenue growth, provides operating costefficiencies that expand our margins and drives our overall business performance.Maximize Sales Opportunities. We sell new and enhanced services and products to our existing customer base to achieve increased revenuesand penetration of our services. Through close coordination of our customer service and sales and marketing efforts, our customer servicerepresentatives suggest to our customers other services they can purchase or enhanced versions of services they already purchase. Many callsinto our customer service centers or visits into one of our retail stores result in sales of additional services and products.Deliver Industry Leading Customer Service. We have positioned ourselves as a customer service leader in the Alaska communicationsmarket. We operate our own customer service department and have empowered our customer service representatives to handle most serviceissues and questions on a single call. We prioritize our customer services to expedite handling of our most valuable customers’ issues,particularly for our largest commercial customers. We believe our integrated approach to customer service, including service set-up, programmingvarious network databases with the customer’s information, installation, and ongoing service, allows us to provide a customer experience thatfosters customer loyalty.Leverage Communications Operations. We continue to expand and evolve our integrated network for the delivery of our services. Our bundledstrategy and integrated approach to serving our customers creates efficiencies of scale and maximizes network utilization. By offering multipleservices, we are better able to leverage our network assets and increase returns on our invested capital. We periodically evaluate our networkassets and continually monitor technological developments that we can potentially deploy to increase network efficiency and performance.4Table of ContentsExpand Our Product Portfolio and Footprint in Alaska. Throughout our history, we have successfully added and expect to continue to add newproducts to our product portfolio. We have a demonstrated history of new product evaluation, development and deployment for our customers, andwe continue to assess revenue-enhancing opportunities that create value for our customers. Where feasible and where economic analysissupports geographic expansion of our network coverage, we are currently pursuing or expect to pursue opportunities to increase the scale of ourfacilities, enhance our ability to serve our existing customers’ needs and attract new customers. Additionally, due to the unique market conditionsin Alaska, we, and in some cases our customers, participate in several federal (and to a lesser extent locally) subsidized programs designed tofinancially support the implementation and purchase of telecommunications services like ours in high cost areas. With these programs we havebeen able to expand our network into previously undeveloped areas of Alaska and, for the first time, offer comprehensive communicationsservices in many rural parts of the state where we would not otherwise be able to construct within appropriate return-on-investment requirements.Make Strategic Acquisitions. We have a history of making and integrating acquisitions of in-state telecommunications providers and otherproviders of complementary services. Our management team will continue to actively pursue and make investments that we believe fit with ourstrategy and networks and that enhance earnings.Description of our Business by Reportable Segment OverviewOur two reportable segments are Wireless and Wireline. Our Wireless segment provides wholesale wireless services to wireless carriers. OurWireline segment offers services and products under three major customer groups as follows: Customer GroupWireline Segment Services and ProductsConsumerBusinessServicesManagedBroadband Retail wirelessXX Data: InternetXXX Data networks XX Managed services XX VideoXX Voice: Long-distanceXXX Local accessXXXThe following discussion includes information about significant services and products, sales and marketing, facilities, competition and seasonalityfor each of our reportable segments. For a discussion and analysis of financial condition and results of operations please see “Part II – Item 7 –Management’s Discussion and Analysis of Financial Condition and Results of Operations.”5Table of ContentsWireless SegmentWireless segment revenues for 2014, 2013 and 2012 are summarized as follows (amounts in thousands): Year Ended December 31, 2014 2013 2012Total Wireless segment revenues1$269,977 197,218 124,7451 See “Part II — Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and note 10 included in “PartII — Item 8 — Consolidated Financial Statements and Supplementary Data” for more information regarding the financial performance of ourWireless segment.Services and ProductsOur Wireless segment offers wholesale wireless services and products to wireless carriers. We provide network transport and access to ourwireless network to wireless carriers. These services allow wireless carriers to provide full wireless services to their customers.Sales and MarketingOur Wireless segment sales and marketing efforts are primarily directed toward increasing the number of wireless carriers we serve and thenumber of voice and data circuits leased. We sell our wireless services primarily through direct contact marketing.FacilitiesWe own statewide wireless facilities that cover most of the Alaska population providing service to urban and rural communities and we willcontinue to expand these networks throughout Alaska in 2015. We own a statewide wireless network that uses GSM/HSPA+, CDMA/EVDO andLong Term Evolution ("LTE"). We own Wi-Fi access points that create a Wi-Fi network branded as TurboZone in Anchorage, Fairbanks, Juneau,Kenai-Soldotna, Matanuska-Susitna Valley, and other areas of the State ("TurboZone").CompetitionOur Wireless segment competes with AT&T, Verizon, and smaller companies. We compete in the wholesale wireless market by offeringcompetitive rates and by providing a comprehensive statewide network to meet the needs of carrier customers.SeasonalityWireless segment revenues derived from our carrier customers have historically been highest in the summer months because of temporarypopulation increases attributable to tourism and increased seasonal economic activity such as construction, commercial fishing, and oil and gasactivities. Our ability to implement construction projects is hampered during the winter months because of cold temperatures, snow, and shortdaylight hours.Major CustomerVerizon was the only major customer of the Wireless segment in 2014. We had no Wireless segment major customers in 2013 or 2012.Wireline SegmentWireline segment revenues for 2014, 2013 and 2012 are summarized as follows (amounts in thousands): Year Ended December 31, 2014 2013 2012Total Wireline segment revenues1$640,221 614,430 585,4361 See “Part II — Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and note 10 included in “PartII — Item 8 — Consolidated Financial Statements and Supplementary Data” for more information regarding the financial performance of ourWireline segment.Services and ProductsOur Wireline segment offers services and products to three major customer groups as follows:6Table of Contents•Consumer - We offer a full range of retail wireless, data, video and voice services to residential customers.•Business Services - We offer a full range of retail wireless, data, video and voice services to businesses, governmental entities,educational institutions, and wholesale data and voice services to common carrier customers. Our products and services offered tobusiness customers include data network services, retail wireless voice and data plans, high-speed Internet service, data center services,cloud computing, video services, voice services, and managed services. Additionally, we sell advertising on our broadcast televisionstations and cable network.•Managed Broadband - We offer Internet, data network and managed services to rural schools and health organizations and regulated voiceservices to residential and commercial customers in rural communities primarily in Southwest Alaska.Sales and MarketingWe offer our services directly to consumer and business customers through our call center, direct mail advertising, television advertising, Internetadvertising, local media advertising, and through our retail stores. Our sales efforts are primarily directed toward increasing the number ofsubscribers we serve, selling bundled services, and generating incremental revenues through product and feature up-sell opportunities. We sell ourmanaged services through direct contact marketing.FacilitiesWe operate a modern, competitive communications network providing switched and dedicated voice and broadband services. Our fiber networkemploys digital transmission technology over our fiber optic facilities within Alaska and between Alaska and the lower 48 states. Our facilitiesinclude digital undersea fiber optic cable systems linking our Alaska terrestrial networks to the networks of other carriers in the lower 48 states, aterrestrial fiber optic cable system connecting Anchorage and Fairbanks, Alaska and a terrestrial fiber optic cable system that extends fromPrudhoe Bay, Alaska to Valdez, Alaska via Fairbanks, Alaska.We serve many rural and remote Alaska locations solely via satellite communications. Each of our satellite transponders is backed up on alternatespacecraft with multiple backup transponders. We operate a hybrid fiber optic cable and digital microwave system (“TERRA”) linking Anchoragewith the Bristol Bay, Yukon-Kuskokwim, and northwest regions of the state. Our video businesses are located throughout Alaska and serve 30 communities and areas in Alaska, including the state’s five largest populationcenters, Anchorage, Fairbanks, the Matanuska-Susitna Valley, the Kenai Peninsula, and Juneau. Our facilities include cable plant and head-enddistribution equipment. The majority of our locations on the fiber routes are served from head-end distribution equipment in Anchorage. All of ourcable systems are completely digital.Our dedicated Internet access and Internet protocol/MPLS data services are delivered to an Ethernet port located at the service point. Ourmanagement platform constantly monitors this port and continual communications are maintained with all of the core and distribution elements inthe network. The availability and quality of service, as well as statistical information on traffic loading, are continuously monitored for qualityassurance. The management platform has the capability to remotely access routers, servers and layer two switches, permitting changes inconfiguration without the need to physically be at the service point. This management platform allows us to offer network monitoring andmanagement services to businesses and governmental entities.CompetitionWe operate in intensely competitive industries and compete with a growing number of companies that provide a broad range of communication,entertainment and information products and services. Technological changes are further intensifying and complicating the competitive landscapeand consumer behavior.Retail Wireless Services and Products CompetitionWe compete with AT&T, Verizon, and other community or regional-based wireless providers, and resellers of those services in Anchorage andother markets. Regulatory policies favor robust competition in wireless7Table of Contentsmarkets. Wireless local number portability helps to maintain a high level of competition in the industry because it allows subscribers to switchcarriers without having to change their telephone numbers.The communications industry continues to experience significant technological changes, as evidenced by the increasing pace of improvements inthe capacity and quality of digital technology, shorter cycles for new products and enhancements and changes in consumer preferences andexpectations. Accordingly, we expect competition in the wireless communications industry to continue to be dynamic and intense as a result ofthe development of new technologies, services and products.The national wireless carriers with whom we compete, AT&T and Verizon, have resources that are greater than ours. These companies havesignificantly greater capital, financial, marketing, human capital, distribution and other resources than we do. Specifically, as a regional wirelesscarrier we may not have immediate access to some wireless handsets that are available to these national wireless carriers. We compete for customers based principally upon price, bundled services, the services and enhancements offered, network quality, customerservice, statewide network coverage and capacity, TurboZone, the type of wireless handsets offered, and the availability of differentiated featuresand services. Our ability to compete successfully will depend, in part, on our marketing efforts and our ability to anticipate and respond to variouscompetitive factors affecting the industry.Data Services and Products CompetitionThe Internet industry is highly competitive, rapidly evolving and subject to constant technological change. Competition is based upon price andpricing plans, service bundles, the types of services offered, the technologies used, customer service, billing services, and perceived quality,reliability and availability. We compete with other Alaska based Internet providers and domestic, non-Alaska based providers that provide nationalservice coverage. Several of the providers headquartered outside of Alaska have substantially greater financial, technical and marketingresources than we do.Niche providers in the industry, both local and national, compete with certain of our Internet service products, such as web hosting, list services,and e-mail.We expect to continue to provide, at reasonable prices and in competitive bundles, a greater variety of data services than are available throughother alternative delivery sources. Additionally, we believe we offer superior technical performance and speed, and responsive community-basedcustomer service. Increased competition, however, may adversely affect our market share and results of operations from our data servicesproduct offerings.Presently, there are a number of competing companies in Alaska that actively sell and maintain data and voice communications systems. Ourability to integrate communications networks and data communications equipment has allowed us to maintain our market position based oncustomer support services rather than price competition alone. These services are blended with other transport products into unique customersolutions, including managed services and outsourcing.Video Services and Products CompetitionOur video systems face competition from services and devices that offer Internet video streaming and distribution of movies, television shows andother video programming, as well as alternative methods of receiving and distributing television signals, including DBS, digital video over telephonelines, broadband IP-based services, wireless and satellite master antenna television systems. Our video systems also face competition frompotential overbuilds of our existing cable systems. The extent to which our video systems are competitive depends, in part, upon our ability toprovide quality programming and other services at competitive prices.Online video services via the Internet are a major growing source of competition for our video services. Additionally, some online video servicesare also beginning to produce or acquire their own original content. However, as a major Internet-provider ourselves, the competition may result inadditional data service subscriber revenue to the extent we grow average Internet revenue per subscriber.We believe that the greatest source of external competition for our video services comes from the DBS industry. Two major companies,DIRECTV and DISH DBS Corporation, are currently offering high-power DBS services in Alaska.8Table of ContentsCompetitive forces will be counteracted by offering expanded programming through digital services. Digital delivery technology is being utilized inall of our systems. We have retransmission agreements with various broadcasters and provide for the uplink/downlink of their signals into certainof our systems, and local programming for our customers. Additionally, our acquisition of television stations provides us the opportunity to createunique content for our subscribers.Video systems generally operate pursuant to franchises granted on a non-exclusive basis. The 1992 Cable Act gives local franchising authoritiesjurisdiction over basic video service rates and equipment in the absence of “effective competition.” The 1992 Cable Act also prohibits franchisingauthorities from unreasonably denying requests for additional franchises and permits franchising authorities to operate video systems. Well-financed businesses from outside the video industry may become competitors for franchises or providers of competing services.We expect to continue to provide, at reasonable prices and in competitive bundles, a greater variety of video services than are available off-air orthrough other alternative delivery sources. Additionally, we believe we offer superior technical performance and responsive community-basedcustomer service. Increased competition, however, may adversely affect our market share and results of operations from our video servicesproduct offerings.Voice Services and Products CompetitionOur most significant competition for local access and long-distance comes from wireless substitution and voice over Internet protocol services.Wireless local number portability allows consumers to retain the same phone number as they change service providers allowing forinterchangeable and portable fixed-line and wireless numbers. A growing number of consumers now use wireless service as their primary voicephone service for local calling. We also compete against Incumbent Local Exchange Carriers ("ILECs"), long-distance resellers and certain smallerrural local telephone companies for local access and long-distance. We have competed by offering what we believe is excellent customer service,cross product discounts, and by providing desirable bundles of services.See “Regulation — Wireline Voice Services and Products” below for more information.SeasonalityOur Wireline segment services and products do not exhibit significant seasonality. Our ability to implement construction projects is hamperedduring the winter months because of cold temperatures, snow and short daylight hours.Major CustomerWe had no Wireline segment major customers in 2014, 2013 or 2012.Sales and Marketing – Company-wideOur sales and marketing strategy hinges on our ability to leverage (i) our unique position as an integrated provider of multiple communications,Internet and video services, (ii) our well-recognized and respected brand names in the Alaskan marketplace and (iii) our leading market positions inthe services and products we offer. By continuing to pursue a marketing strategy that takes advantage of these characteristics, we believe wecan increase our customer market penetration and retention rates, increase our share of our customers’ aggregate voice, video, data and wirelessservices expenditures and achieve continued growth in revenues and operating cash flow.Environmental RegulationsWe undertake activities that may, under certain circumstances, affect the environment. Accordingly, they may be subject to federal, state, andlocal laws designed to preserve or protect the environment, including the Clean Water Act and the Emergency Planning and Community Right-to-Know Act. The Federal Communications Commission ("FCC"), Bureau of Land Management, U.S. Forest Service, U.S. Fish and Wildlife Service,U.S. Army Corps of Engineers, and National Park Service are among the federal agencies required by the National Environmental Policy Act of1969 to consider the environmental impact of actions they authorize, including facility construction.The principal effect of our facilities on the environment would be in the form of construction of facilities and networks at various locations in Alaskaand between Alaska, Washington, and Oregon. Our facilities have been constructed in accordance with federal, state and local building codes andzoning regulations whenever and wherever9Table of Contentsapplicable. Some facilities may be on wetlands that may be subject to state and/or federal regulation. We obtain federal, state, and local permits,as required, for our projects and operations. We are unaware of any material violations of federal, state or local regulations or permits.Patents, Trademarks, and LicensesWe do not hold patents, franchises (with the exception of video services as described below) or concessions for communications services or localaccess services. We hold a number of federally registered service marks used by our reportable segments. The Communications Act of 1934, asamended, gives the FCC the authority to license and regulate the use of the electromagnetic spectrum for radio communications. We holdlicenses for our satellite and microwave transmission facilities for provision of long-distance services provided by our Wireline segment. We holdvarious licenses for spectrum and broadcast television use. These licenses may be revoked and license renewal applications may be denied forcause. However, we expect these licenses to be renewed in due course when, at the end of the license period, a renewal application will be filed.We hold licenses for earth stations that are generally licensed for fifteen years. The FCC also issues a single blanket license for a large number oftechnically identical earth stations. Our operations may require additional licenses in the future.We are certified through the Regulatory Commission of Alaska ("RCA") to provide video service by Certificates of Public Convenience andNecessity (“CPCN”). These CPCNs are nonexclusive certificates defining each authorized service area. Although CPCNs have no statedexpiration date, they may be revoked due to cause.RegulationOur businesses are subject to substantial government regulation and oversight. The following summary of regulatory issues does not purport todescribe all existing and proposed federal, state, and local laws and regulations, or judicial and regulatory proceedings that affect ourbusinesses. Existing laws and regulations are reviewed frequently by legislative bodies, regulatory agencies, and the courts and are subject tochange. We cannot predict at this time the outcome of any present or future consideration of proposed changes to governing laws and regulations.Wireless Services and ProductsGeneral. The FCC regulates the licensing, construction, interconnection, operation, acquisition, and transfer of wireless network systems in theUnited States pursuant to the Communications Act. As wireless licensees, we are subject to regulation by the FCC, and must comply with certainbuild-out and other license conditions, as well as with the FCC’s specific regulations governing wireless services. The FCC does not currentlyregulate rates for services offered by commercial mobile radio service providers (the official legal description for wireless service providers).Commercial mobile radio service wireless systems are subject to Federal Aviation Administration and FCC regulations governing the location,lighting, construction, modification, and registration of antenna structures on which our antennas and associated equipment are located and arealso subject to regulation under federal environmental laws and the FCC’s environmental regulations, including limits on radio frequency radiationfrom wireless handsets and antennas on towers.Universal Service. The High Cost Program of the Universal Service Fund ("USF") pays Eligible Telecommunications Carriers ("ETCs") to supportthe provision of facilities-based wireless telephone service in high cost areas. A wireless carrier may seek ETC status so that it can receivesupport from the USF. Under FCC regulations and RCA orders, we are an authorized ETC for purposes of providing wireless telephone service inAnchorage, Juneau, Fairbanks, and the Matanuska Telephone Association, Inc. ("MTA") study area (which includes the Matanuska-SusitnaValley) and other small areas throughout Alaska. Without ETC status, we would not qualify for USF support in these areas or other rural areaswhere we propose to offer facilities-based wireless telephone services, and our net cost of providing wireless telephone services in these areaswould be materially adversely affected.On November 29, 2011, the FCC released rules reforming the methodology for distributing USF high cost support for voice and broadbandservices, as well as the access charge regime for terminating traffic between carriers. Support for competitive eligible telecommunications carriers(“CETCs”) serving areas that generally include Anchorage, Fairbanks, and Juneau followed national reforms and had support per provider perservice area10Table of Contentscapped as of January 1, 2012, and a five-step phase-down commenced on July 1, 2012, which is currently frozen pending the adoption of asuccessor mechanism. Support to Remote Alaska locations was capped as of January 1, 2012 and is being distributed on a per-line basis untilthe implementation of a successor funding mechanism. A further rulemaking to consider successor funding mechanisms is underway. We cannotpredict at this time the outcome of this proceeding or its effect on Remote high cost support available to us, but our revenue for providing servicesin these areas would be materially adversely affected by a substantial reduction of USF support. On February 6, 2012, the FCC released its Report and Order and Further Notice of Proposed Rulemaking to comprehensively reform andmodernize the USF’s Lifeline program. The Lifeline program is administered by the Universal Service Administrative Company ("USAC") and isdesigned to ensure that quality telecommunications services are available to low-income customers at just, reasonable, and affordable rates. Theorder adopted several reforms, including a requirement for annual recertification of all Lifeline subscribers. Failure to correctly recertify Lifelinesubscribers could materially adversely affect our Lifeline revenues and/or increase our costs in the form of FCC fines for failure to comply withLifeline rules.Interconnection. We have completed negotiations and the RCA has approved current direct wireless interconnection agreements with all of themajor Alaska ILECs. These are in addition to indirect interconnection arrangements utilized elsewhere.See “Description of Our Business by Reportable Segment — Regulation — Wireline Voice Services and Products — Regulatory RegimeApplicable to IP-based Networks” for more information.Emergency 911. The FCC has imposed rules requiring carriers to provide emergency 911 services, including enhanced 911 (“E911”) services thatprovide to local public safety dispatch agencies the caller’s phone number and approximate location. Providers are required to transmit thegeographic coordinates of the customer’s location, either by means of network-based or handset-based technologies, within accuracy parametersrevised by the FCC, to be implemented over a phase-in period. Due to Alaska’s relatively low population and low cell-site densities, we haveexcluded certain areas from E911 coverage where cell triangulation is not feasible, pursuant to FCC rule. We have also filed for a waiver, whichremains pending, for remaining areas where triangulation may be technically feasible, but where the cell-site densities are insufficient to reach theFCC’s standard. We have filed for a separate waiver, also pending, regarding the FCC’s recently adopted text-to-911 rules due to technicallimitations in our network and the inability of vendors to provide a workable solution; we expect to develop a text-to-911 technical solution duringthe first half of 2015. Providers may not demand cost recovery as a condition of providing E911, although they are permitted to negotiate costrecovery if it is not mandated by the state or local governments.State and Local Regulation. While the Communications Act generally preempts state and local governments from regulating the entry of, and therates charged by, wireless carriers, it also permits a state to petition the FCC to allow it to impose commercial mobile radio service rate regulationwhen market conditions fail to adequately protect customers and such service is a replacement for a substantial portion of the telephone wirelineexchange service within a state. No state currently has such a petition on file, and all prior efforts have been rejected.In addition, the Communications Act does not expressly preempt the states from regulating the “terms and conditions” of wireless service. Severalstates have invoked this “terms and conditions” authority to impose or propose various consumer protection regulations on the wireless industry.State attorneys general have also become more active in enforcing state consumer protection laws against sales practices and services ofwireless carriers. States also may impose their own universal service support requirements on wireless and other communications carriers, similarto the contribution requirements that have been established by the FCC.States have become more active in attempting to impose new taxes and fees on wireless carriers, such as gross receipts taxes. Wheresuccessful, these taxes and fees are generally passed through to customers and result in higher costs to customers.At the local level, wireless facilities typically are subject to zoning and land use regulation. Neither local nor state governments may categoricallyprohibit the construction of wireless facilities in any community or take actions, such as indefinite moratoria, which have the effect of prohibitingconstruction. Nonetheless, securing state and local government approvals for new tower sites has been and is likely to continue to be difficult,lengthy and costly.11Table of ContentsInternet-based Services and ProductsGeneral. There is no one entity or organization that governs the Internet. Each facilities-based network provider that is interconnected with theglobal Internet controls operational aspects of their own network. Certain functions, such as IP addressing, domain name routing, and the definitionof the TCP/IP protocol, are coordinated by an array of quasi-governmental, intergovernmental, and non-governmental bodies. The legal authority ofthese bodies is not precisely defined.The vast majority of users connect to the Internet over facilities of existing communications carriers. Those communications carriers are subjectto varying levels of regulation at both the federal and state level. Thus, non-Internet-specific regulatory decisions exercise a significant influenceover the economics of the Internet market.Many aspects of the coordination and regulation of Internet activities and the underlying networks over which those activities are conducted areevolving. Internet-specific and non-Internet-specific changes in the regulatory environment, including changes that affect communications costs orincrease competition from ILECs or other communications services providers, could adversely affect our costs and the prices at which we sellInternet-based services.On November 20, 2011, the FCC issued rules governing the activities of cable operators and other Internet service providers in connection with theprovision of Internet service. The rules applicable to cable operators and other wireline providers generally prohibited blocking lawful content andprohibiting unreasonable discrimination, outside of reasonable network management, as well as imposing transparency requirements. For wirelessproviders, the transparency rule and a less restrictive version of the blocking rule applied. On January 14, 2014, in a case challenging these rules,the U.S. Court of Appeals for the D.C. Circuit vacated the anti-discrimination and anti-blocking rules, upheld the transparency rules, and remandedthe case to the FCC for further proceedings. The majority opinion held that the FCC possessed the general statutory authority to adopt these rules,but did so in a manner that violated specific statutory prohibitions against imposing common carrier regulations on non-telecommunicationsservices.On February 26, 2015, the FCC adopted an order reclassifying Internet service as a telecommunications service under Title II of theCommunications Act. This order prohibits broadband providers from blocking or throttling most lawful public Internet traffic, and from engaging inpaid prioritization of that traffic. The order also strengthens its transparency rules, which require accurate and truthful service disclosures,sufficient for consumers to make informed choices, for example, about speed, price and fees, latency, and network management practices. Theorder allows broadband providers to engage in reasonable network management, including using techniques to address traffic congestion. Theserules apply equally to wired and wireless broadband services. The order refrains from applying rate regulation and tariff requirements on broadbandservices. While we do not believe that the FCC order conflicts with our existing practices or offerings, the order will impose regulatory burdens,likely increase our costs, and could adversely affect the manner and price of providing service.Video Services and ProductsGeneral. Because video communications systems use local streets and rights-of-way, they generally are operated pursuant to franchises (whichcan take the form of certificates, permits or licenses) granted by a municipality or other state or local government entity. The RCA is thefranchising authority for all of Alaska. We believe that we have generally met the terms of our franchises, which do not require periodic renewal,and have provided quality levels of service. Military franchise requirements also affect our ability to provide video services to military bases.The RCA is also certified under federal law to regulate rates for the basic service tier on our video systems. Under state law, however, videoservice is exempt from regulation unless subscribers petition the RCA. At present, regulation of basic video rates takes place only in Juneau. TheRCA does not regulate rates for cable modem service.Must Carry/Retransmission Consent. The 1992 Cable Act contains broadcast signal carriage requirements that allow local commercial televisionbroadcast stations to elect once every three years to require a cable system to carry the station, subject to certain exceptions, or to negotiate for“retransmission consent” to carry the station.The FCC has adopted rules to require cable operators to carry the digital programming streams of broadcast television stations. Further, the FCChas declined to require any cable operator to carry multiple digital programming12Table of Contentsstreams from a single broadcast television station, but should the FCC change this policy, we would be required to devote additional cablecapacity to carrying broadcast television programming streams, a step that could require the removal of other programming services.Segregated Security for Set-top Devices. The FCC mandated, effective July 1, 2007, that all new set-top video navigation devices must segregatethe security function from the navigation function. The new devices are more expensive than existing equipment, and compliance would increaseour cost of providing video services. In late 2014, the President signed into law the STELA Reauthorization Act of 2014 (“STELAR”), which repealsthe navigation device integrated security ban effective December 30, 2015.AllVid Proceeding. On April 21, 2010, the FCC adopted a Notice of Inquiry to consider ways to develop a standardized interface for accessingvideo content, as an alternative to set-top boxes. Adoption of new rules or standards in this area could affect the manner in which we deliver videoproducts to our customers. Pursuant to STELAR, the FCC has convened a Downloadable Security Technical Advisory Committee (“DSTAC”) toconsider and recommend performance objectives, technical capabilities and technical standards to promote competitive availability of navigationdevices. The DSTAC report is due by September 30, 2015. We are unable to predict if the FCC will act on the report to propose concrete rules atthat time.Pole Attachments. The Communications Act requires the FCC to regulate the rates, terms and conditions imposed by public utilities for cablesystems’ use of utility pole and conduit space unless state authorities can demonstrate that they adequately regulate pole attachment rates. In theabsence of state regulation, the FCC administers pole attachment rates on a formula basis. This formula governs the maximum rate certainutilities may charge for attachments to their poles and conduit by companies providing communications services, including cable operators. TheRCA, however, does not use the federal formula and instead has adopted its own formula that has been in place since 1987. This formula could besubject to further revisions upon petition to the RCA. In addition, on April 7, 2011, the FCC adopted an order to rationalize different poleattachment rates among types of services. The United States Court of Appeals, D.C. Circuit, upheld the FCC’s rules, denying challenges fromseveral utility companies. Though the general purpose of the rule changes was to ensure pole attachment rates as low and as uniform aspossible, we do not expect the rules to have an immediate impact on the terms under which we access poles. In addition, because the RCA hasadopted its own formula, the FCC’s reclassification of broadband service as a “telecommunications service” is not anticipated to have any near-term impact. We cannot predict the likelihood of the RCA changing its formula, adopting the federal formula, or relinquishing its oversight of poleattachments to the FCC, any of which could increase the cost of our operations.Copyright. Cable television systems are subject to federal copyright licensing covering carriage of television and radio broadcast signals. Inexchange for filing certain reports and contributing a percentage of their revenues to a federal copyright royalty pool that varies depending on thesize of the system, the number of distant broadcast television signals carried, and the location of the cable system, cable operators can obtainblanket permission to retransmit copyrighted material included in broadcast signals. The possible modification or elimination of this compulsorycopyright license is the subject of continuing legislative review. We cannot predict the outcome of this legislative review, which could adverselyaffect our ability to obtain desired broadcast programming. Copyright clearances for non-broadcast programming services are arranged throughprivate negotiations.Wireline Voice Services and ProductsGeneral. As an interexchange carrier, we are subject to regulation by the FCC and the RCA as a non-dominant provider of interstate, international,and intrastate long-distance services. As a state-certificated competitive local exchange carrier, we are subject to regulation by the RCA and theFCC as a non-dominant provider of local communications services. Military franchise requirements also affect our ability to providecommunications services to military bases.Universal Service. The USF pays ETCs to support the provision of facilities-based wireline telephone service in high cost areas. Under FCCregulations and RCA orders, we are an authorized ETC for purposes of providing wireline local exchange service in Anchorage, Juneau, Fairbanks,the MTA study area (which includes the Matanuska-Susitna Valley), and other small areas throughout Alaska. Without ETC status, we would notqualify for USF support in these areas or other rural areas where we propose to offer facilities-based wireline telephone services, and our net costof providing local telephone services in these areas would be materially adversely affected. See “Description of Our Business by ReportableSegment - Regulation - Wireless Services and Products - Universal Service” for information on USF reform.13Table of ContentsRural Exemption and Interconnection. A Rural Telephone Company is exempt from compliance with certain material interconnection requirementsunder Section 251(c) of the 1996 Telecom Act, including the obligation to negotiate Section 251(b) and (c) interconnection requirements in goodfaith, unless and until a state regulatory commission lifts such “rural exemption” or otherwise finds it not to apply. All ILECs in Alaska are RuralTelephone Companies except ACS in its Anchorage study area. We participated in numerous proceedings regarding the rural exemptions ofvarious ILECs, including ACS (for its Fairbanks and Juneau operating companies), MTA and Ketchikan Public Utilities, in order to achieve thenecessary interconnection agreements with the remaining ILECs. In other cases the interconnection agreements were reached by negotiationwithout regard to the implications of the ILEC’s rural exemption.We have completed negotiation and/or arbitration of the necessary interconnection provisions and the RCA has approved current wirelineInterconnection Agreements between GCI and all of the major ILECs. We have entered all of the major Alaskan markets with local accessservices.See “Description of Our Business by Reportable Segment — Consumer — Competition — Voice Services and Products Competition” for moreinformation.Access Charges and Other Regulated Fees. The FCC regulates the fees that local telephone companies charge long-distance companies foraccess to their local networks. On November 29, 2011, the FCC released rules to restructure and reduce over time originating interstate accesscharges, along with a proposal to adopt similar reforms applicable to terminating interstate access charges. We do not anticipate that the adoptedchanges, for which implementation began in 2012, will have a material impact on our operations, except that the reduction of interstate accessrates generally will result in a cost savings on access charges to us. However, the details of implementation in general and between differentclasses of technology continue to be addressed, and they could affect the economics of some aspects of our business. We cannot predict at thistime the impact of this implementation or future implementation of adopted reforms, but we do not expect it to have a material impact on ouroperations.Access to Unbundled Network Elements. The ability to obtain unbundled network elements ("UNEs") is an important element of our local accessservices business. We cannot predict the extent to which existing FCC rules governing access to and pricing for UNEs will be changed in the faceof additional legal action and the impact of any further rule modifications that are yet to be determined by the FCC. Moreover, the future regulatoryclassification of services that are transmitted over facilities may impact the extent to which we will be permitted access to suchfacilities. Changes to the applicable regulations could result in a change in our cost of serving new and existing markets.Local Regulation. We may be required to obtain local permits for street opening and construction permits to install and expand our networks. Localzoning authorities often regulate our use of towers for microwave and other communications sites. We also are subject to general regulationsconcerning building codes and local licensing. The Communications Act requires that fees charged to communications carriers be applied in acompetitively neutral manner, but there can be no assurance that ILECs and others with whom we will be competing will bear costs similar tothose we will bear in this regard.Regulatory Regime Applicable to IP-based Networks. On January 30, 2014, the FCC adopted an order calling for experiments to examine how bestto accelerate the technological and regulatory transitions from traditional TDM-based networks to IP-based technologies. Although no entity hasproposed conducting a technology transition experiment in our service territory in response to the FCC’s January 2014 order, additional proposalsfor experiments are possible. We cannot predict whether additional proposals for experiments might be submitted to the FCC nor any resultingproceedings or their effect on us. The FCC also has other open dockets through which it might make changes to the regulatory regime applicableto IP-based networks. A change in regulatory obligation or classification that interferes with our ability to exchange traffic with other providers, thatraises the cost of doing so, or that adversely affects eligibility for USF support could materially affect our net cost of and revenue from providinglocal services.Rural Health Care Program. On December 12, 2012, the FCC created the Healthcare Connect Fund to supplement the existing Rural Health CareProgram of the USF. Healthcare providers can choose to participate under either the14Table of Contentsexisting Rural Health Care Program or the new Healthcare Connect Fund. We cannot predict at this time the impact of this change but we do notexpect it to have a material impact on our operations.Schools and Libraries Program. On July 11 and December 11, 2014, the FCC adopted orders modernizing the USF Schools and Libraries Program("E-Rate"). These orders, among other things, increased the annual E-Rate cap by approximately $1.5 billion, designated funds for internalconnections within schools and libraries, and eliminated funding for certain legacy services, such as voice, to increase the availability of 21stcentury connectivity to support digital learning in schools nationwide. We cannot at this time predict the effect of these orders on the overall E-Rate support available to our schools and libraries customers, but the elimination of funding of certain services, including video conferencingservices, could materially affect our revenue from such customers.Financial Information about our Foreign and Domestic Operations and Export SalesWe do not have significant foreign operations or export sales. We conduct our operations throughout the contiguous United States and Alaska andbelieve that any subdivision of our operations into distinct geographic areas would not be meaningful.Company-Sponsored ResearchWe have not expended material amounts during the last three fiscal years on company-sponsored research activities.Geographic Concentration and the Alaska EconomyWe offer wireless, data and voice telecommunication services and video services to customers primarily throughout Alaska. Because of thisgeographic concentration, growth of our business and operations depends upon economic conditions in Alaska. The economy of Alaska isdependent upon the natural resource industries, and in particular oil production, as well as government spending, investment earnings and tourism.A long-term decrease in oil prices may impact spending by the oil and gas industry and the government, which could negatively impact ourrevenue. The government spending is comprised of state government and United States military spending. Any deterioration in these marketscould have an adverse impact on us.EmployeesWe employed 2,255 persons as of December 31, 2014, and we are not subject to any collective bargaining agreements with our employees. Webelieve our future success will depend upon our continued ability to attract and retain highly skilled and qualified employees. We believe thatrelations with our employees are satisfactory.OtherNo material portion of our business is subject to renegotiation of profits or termination of contracts at the election of the federal government.Item 1A. Risk Factors.Factors That May Affect Our Business and Future ResultsAdditional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affectour business operations. Any of the following risks could materially and adversely affect our business, financial position, results of operations orliquidity.We face competition that may reduce our market share and harm our financial performance.There is substantial competition in the telecommunications and entertainment industries. Through mergers and various service integrationstrategies, major providers are striving to provide integrated communications services offerings within and across geographic markets. We faceincreased wireless services competition from national carriers in the Alaska market and increasing video services competition from DBS providers.We expect competition to increase as a result of the rapid development of new technologies, services and products. We cannot predict which ofmany possible future technologies, products or services will be important to maintain our competitive position or what expenditures will be requiredto develop and provide these technologies,15Table of Contentsproducts or services. Our ability to compete successfully will depend on marketing and on our ability to anticipate and respond to variouscompetitive factors affecting the industry, including new services that may be introduced, changes in consumer preferences, economic conditionsand pricing strategies by competitors. To the extent we do not keep pace with technological advances or fail to timely respond to changes incompetitive factors in our industry and in our markets, we could lose market share or experience a decline in our revenue and netincome. Competitive conditions create a risk of market share loss and the risk that customers shift to less profitable lower marginservices. Competitive pressures also create challenges for our ability to grow new businesses or introduce new services successfully andexecute our business plan. We also face the risk of potential price cuts by our competitors that could materially adversely affect our market shareand gross margins.For more information about competition by segment, see the sections titled “Competition” included in “Item 1 — Business — Description of ourBusiness by Reportable Segment.”If we experience low or negative rates of subscriber acquisition or high rates of turnover, our financial performance will be impaired.We are in the business of selling communications and entertainment services to subscribers, and our economic success is based on our ability toretain current subscribers and attract new subscribers. If we are unable to retain and attract subscribers, our financial performance will beimpaired. Our rates of subscriber acquisition and turnover are affected by a number of competitive factors including the size of our service areas,network performance and reliability issues, our device and service offerings, subscribers’ perceptions of our services, and customer care quality.Managing these factors and subscribers’ expectations is essential in attracting and retaining subscribers. Although we have implementedprograms to attract new subscribers and address subscriber turnover, we cannot assure you that these programs or our strategies to addresssubscriber acquisition and turnover will be successful. A high rate of turnover or low or negative rate of new subscriber acquisition would reducerevenues and increase the total marketing expenditures required to attract the minimum number of subscribers required to sustain our businessplan which, in turn, could have a material adverse effect on our business, financial condition and results of operations.We may be unable to obtain or maintain the roaming services we need from other carriers to remain competitive.AT&T Wireless and Verizon have national networks which enable them to offer automatic roaming services to their subscribers at a lower costthan we can offer. The networks we operate do not, by themselves, provide national coverage and we must pay fees to other carriers who provideroaming services to us. We currently rely on roaming agreements with several carriers for the majority of our roaming services. We believe thatthe rates charged to us by some of these carriers may be higher than the rates they charge to certain other roaming partners.The FCC has adopted rules requiring commercial mobile radio service providers to provide automatic roaming, upon request, for voice and SMStext messaging services on just, reasonable and non-discriminatory terms. The FCC has also adopted rules generally requiring carriers to offerdata roaming services. The rules do not provide or mandate any specific mechanism for determining the reasonableness of roaming rates forvoice, SMS text messaging or data services and require that roaming complaints be resolved on a case-by-case basis, based on a non-exclusivelist of factors that can be taken into account in determining the reasonableness of particular conduct or rates. If we were to lose the benefit of oneor more key roaming or wholesale agreements unexpectedly, we may be unable to obtain similar replacement agreements and as a result may beunable to continue providing nationwide voice and data roaming services for our customers or may be unable to provide such services on a cost-effective basis. Our inability to obtain new or replacement roaming services on a cost-effective basis may limit our ability to compete effectivelyfor wireless customers, which may increase our turnover and decrease our revenues, which in turn could materially adversely affect our business,financial condition and results of operations.We may be unable to successfully manage the integration of the wireless subscribers acquired from ACS in the Wireless Acquisition orwe may be unable to realize the anticipated synergies.On February 2, 2015, we completed the Wireless Acquisition which included the acquisition of wireless subscribers from ACS. Our business maybe negatively impacted if we are unable to effectively integrate the new wireless subscribers or recognize the expected synergies. Integrationplanning prior to the subscriber acquisition and the implementation of our integration plans following the subscriber acquisition will requiresignificant time and focus16Table of Contentsfrom management and may divert attention from the day-to-day operations of our other businesses. Additionally, completion of the subscriberacquisition could disrupt current plans and operations, which could delay the achievement of our strategic objectives. Integration difficulties couldhave an adverse effect on our business, financial condition, and results of operations.We may be unable to realize the anticipated cost savings from the Wireless Acquisition or may incur additional and/or unexpected costsin order to realize them. Significant costs have been incurred and are expected to be incurred in connection with the WirelessAcquisition, including legal, accounting, financial advisory and other costs.On February 2, 2015, we completed the Wireless Acquisition. We are implementing a series of cost savings initiatives that we expect to result inrecurring, annual cost savings. There can be no assurance that we will realize the anticipated cost savings from the Wireless Acquisition in theanticipated amounts or within the anticipated time frames or cost expectations or at all.These or any other cost savings that we realize may differ materially from our estimates. We cannot provide assurances that these anticipatedsavings will be achieved or that our programs and improvements will be completed as anticipated or at all. In addition, any cost savings that werealize may be offset, in whole or in part, by reductions in revenues or through increases in other expenses.We expect to incur significant one-time, non-recurring costs to achieve the anticipated synergies in connection with the Wireless Acquisition. Inaddition, we expect to incur significant transaction fees and other costs related to the Wireless Acquisition. Additional unanticipated costs may beincurred as we integrate our new wireless subscribers. Failure to realize the expected costs savings and operating synergies and recognition ofnon-recurring costs related to the Wireless Acquisition could result in increased costs and have an adverse effect on our business, financialcondition, and results of operations.Our business is subject to extensive governmental legislation and regulation. Applicable legislation and regulations and changes tothem could adversely affect our business, financial position, results of operations or liquidity.Wireless Services. The licensing, construction, operation, sale and interconnection arrangements of wireless communications systems areregulated by the FCC and, depending on the jurisdiction, state and local regulatory agencies. In particular, the FCC imposes significant regulationon licensees of wireless spectrum with respect to: •How radio spectrum is used by licensees;•The nature of the services that licensees may offer and how such services may be offered; and•Resolution of issues of interference between spectrum bands.Although the Communications Act of 1934, as amended, preempts state and local regulation of market entry and the rates charged by commercialmobile radio service providers, states may exercise authority over such things as certain billing practices and consumer-related issues. Theseregulations could increase the costs of our wireless operations. The FCC grants wireless licenses for terms of generally ten years that are subjectto renewal and revocation. FCC rules require all wireless licensees to meet certain build-out requirements and substantially comply with applicableFCC rules and policies and the Communications Act of 1934, as amended, in order to retain their licenses. Failure to comply with FCCrequirements in a given license area could result in revocation of the license for that license area. There is no guarantee that our licenses will berenewed.Commercial mobile radio service providers must implement E911 capabilities in accordance with FCC rules. While we believe that we arecurrently in compliance with such FCC rules, the failure to deploy E911 service consistent with FCC requirements could subject us to significantfines.The FCC, together with the Federal Aviation Administration, also regulates tower marking and lighting. In addition, tower construction is affected byfederal, state and local statutes addressing zoning, environmental protection and historic preservation. The FCC requires local notice in anycommunity in which it is seeking FCC Antenna Structure Registration to build a tower. Local notice provides members of the community with anopportunity to comment on or challenge the tower construction for environmental reasons. This rule change could cause delay for certain towerconstruction projects.17Table of ContentsInternet Services. On February 26, 2015, the FCC adopted an order reclassifying Internet service as a telecommunications service under Title IIof the Communications Act. The order prohibits broadband providers from blocking or throttling most lawful public Internet traffic, and fromengaging in paid prioritization of that traffic. The order also strengthens its transparency rules, which require accurate and truthful servicedisclosures, sufficient for consumers to make informed choices, for example, about speed, price and fees, latency, and network managementpractices. The order allows broadband providers to engage in reasonable network management, including using techniques to address trafficcongestion. The new rules apply equally to wired and wireless broadband services. The order refrains from imposing rate regulation or tariffrequirements on broadband services.We cannot predict how the FCC will interpret or apply its new rules. In addition, although the FCC forbore from many of the provisions of Title II,we cannot predict how the FCC will interpret or apply the statutory provisions and regulations from which it did not forbear. It is possible that theFCC could interpret or apply its new rules or “Title II” statutory provisions or regulations in a way that has a material adverse effect on ourbusiness, financial position, results of operations, or liquidity. There also is a risk class action lawsuits arising under the provisions of Title II fromwhich the FCC did not forbear could have similar negative impacts. Proposals have been made before Congress to mandate Open Internet regulation that could supplement or supplant in whole or part the FCC’s newrules. We currently cannot predict whether any such legislation will be adopted nor what impacts are most likely. Video Services. The cable television industry is subject to extensive regulation at various levels, and many aspects of such regulation arecurrently the subject of judicial proceedings and administrative or legislative proposals. The law permits certified local franchising authorities toorder refunds of rates paid in the previous 12-month period determined to be in excess of the reasonable rates. It is possible that rate reductions orrefunds of previously collected fees may be required of us in the future. Currently, pursuant to Alaska law, the basic video rates in Juneau are theonly rates in Alaska subject to regulation by the local franchising authority; the basic rates in Juneau were reviewed and approved by the RCA inJuly 2010.Other existing federal regulations, currently the subject of judicial, legislative, and administrative review, could change, in varying degrees, themanner in which video systems operate. Neither the outcome of these proceedings nor their impact on the cable television industry in general, oron our activities and prospects in the cable television business in particular, can be predicted at this time. There can be no assurance that futureregulatory actions taken by Congress, the FCC or other federal, state or local government authorities will not have a material adverse effect on ourbusiness, financial position, results of operations or liquidity.Local Access Services. Our success in the local telephone market depends on our continued ability to obtain interconnection, access and relatedservices from local exchange carriers on terms that are reasonable and that are based on the cost of providing these services. Our local telephoneservices business faces the risk of unfavorable changes in regulation or legislation or the introduction of new regulations. Our ability to provideservice in the local telephone market depends on our negotiation or arbitration with local exchange carriers to allow interconnection to the carrier’sexisting local telephone network (in some Alaska markets at cost-based rates), to establish dialing parity, to obtain access to rights-of-way, toresell services offered by the local exchange carrier, and in some cases, to allow the purchase, at cost-based rates, of access to unbundlednetwork elements. Future negotiations or arbitration proceedings with respect to new or existing markets could result in a change in our cost ofserving these markets via the facilities of the ILEC or via wholesale offerings.For more information about Regulations affecting our operations, see “Item 1 — Business — Regulation.”Loss of our ETC status would disqualify us for USF support.The USF pays support to ETCs to support the provision of facilities-based wireline and wireless telephone service in high cost areas. If we wereto lose our ETC status in any of the study areas where we are currently an authorized ETC, we would be ineligible to receive USF support forproviding service in that area. Loss of our ETC status could have an adverse effect on our business, financial position, results of operations orliquidity.18Table of ContentsRevenues and accounts receivable from USF support may be reduced or lost.We receive support from each of the various USF programs: high cost, low income, rural health care, and schools and libraries. This support was19%, 18%, and 18% of our revenue for the years ended December 31, 2014, 2013 and 2012, respectively. We had USF net receivables of $109.6million and $124.3 million at December 31, 2014 and 2013, respectively. The programs are subject to change by regulatory actions taken by theFCC or legislative actions. Changes to any of the USF programs that we participate in could result in a material decrease in revenue and accountsreceivable, which could have an adverse effect on our business, financial position, results of operations or liquidity.See “Description of Our Business by Reportable Segment — Regulation — Wireless Services and Products — Universal Service” and “Descriptionof Our Business by Reportable Segment — Regulation — Wireline Voice Services and Products — Universal Service” for more information.Programming expenses for our video services are increasing, which could adversely affect our business.We expect programming expenses for our video services to continue to increase in the foreseeable future. The multichannel video providerindustry has continued to experience an increase in the cost of programming, especially sports programming. In addition, as we add programmingto our video services or if we choose to distribute existing programming to our customers through additional delivery platforms, we may incurincreased programming expenses. If we are unable to raise our customers’ rates or offset such programming cost increases through the sale ofadditional services, the increasing cost of programming could have an adverse impact on our business, financial condition, or results ofoperations. Moreover, as our contracts with content providers expire, there can be no assurance that they will be renewed on acceptable terms orthat they will be renewed at all, in which case we may be unable to provide such content as part of our video services and our business could beadversely affected.The decline in our Wireline segment voice services’ results of operations, which include long-distance and local access services, mayaccelerate.We expect our Wireline voice services’ results of operations, which include long-distance and local access services, will continue to decline. Ascompetition from wireless carriers, such as ourselves, increases we expect our long-distance and local access services' subscribers and revenueswill continue to decline and the rate of decline may accelerate.We may not be able to satisfy the requirements of our participation in a New Markets Tax Credit ("NMTC") program for funding ourTERRA-NW project.In 2011 and 2012 we entered into three separate arrangements under the NMTC program with US Bancorp to help fund various phases of ourTERRA-NW project. In connection with the NMTC transactions we received proceeds which were restricted for use on TERRA-NW. The NMTCsare subject to 100% recapture of the tax credit for a period of seven years as provided in the Internal Revenue Code. We are required to be incompliance with various regulations and contractual provisions that apply to the NMTC arrangements. We have agreed to indemnify US Bancorpfor any loss or recapture of its $56.0 million in NMTCs until such time as our obligation to deliver tax benefits is relieved in December 2019. Non-compliance with applicable requirements could result in projected tax benefits not being realized by US Bancorp and could have an adverse effecton our financial position, results of operations or liquidity.Failure to complete development, testing and deployment of a new technology that supports new services could affect our ability tocompete in the industry. In addition, the technology we use may place us at a competitive disadvantage.We develop, test and deploy various new technologies and support systems intended to enhance our competitiveness by both supporting newservices and features and reducing the costs associated with providing those services or features. Successful development and implementationof technology upgrades depend, in part, on the willingness of third parties to develop new applications in a timely manner. We may notsuccessfully complete the development and rollout of new technology and related features or services in a timely manner, and they may not bewidely accepted by our customers or may not be profitable, in which case we could not recover our investment in the technology. Deployment oftechnology supporting new service offerings may also adversely affect19Table of Contentsthe performance or reliability of our networks with respect to both the new and existing services. Any resulting customer dissatisfaction couldaffect our ability to retain customers and may have an adverse effect on our financial position, results of operations, or liquidity. In addition tointroducing new technologies and offerings, we must phase out outdated and unprofitable technologies and services. If we are unable to do so ona cost-effective basis, we could experience reduced profits.Unfavorable general economic conditions could have a material adverse effect on our financial position, results of operations andliquidity.Unfavorable general economic conditions could negatively affect our business including our financial position, results of operations, or liquidity, aswell as our ability to service debt, pay other obligations and enhance shareholder returns. While it is often difficult for us to predict the impact ofgeneral economic conditions on our business, these conditions could adversely affect the affordability of and demand for some of our products andservices and could cause customers to shift to lower priced products and services or to delay or forgo purchases of our products andservices. One or more of these circumstances could cause our revenue to decline. Also, our customers may not be able to obtain adequateaccess to credit, which could affect their ability to make timely payments to us. If that were to occur, we could be required to increase ourallowance for doubtful accounts, and the number of days outstanding for our accounts receivable could increase.Our business is geographically concentrated in Alaska. Any deterioration in the economic conditions in Alaska could have a materialadverse effect on our financial position, results of operations and liquidity.We offer wireless and wireline telecommunication services and video services to customers primarily throughout Alaska. Because of thisgeographic concentration, growth of our business and operations depends upon economic conditions in Alaska. The economy of Alaska isdependent upon natural resource industries, and in particular oil exploration, development, and production, as well as government spending,investment earnings and tourism. The government spending is comprised of state government and United States military spending. Anydeterioration in these markets, such as a long-term decrease in oil prices, or the occurrence of a single disruptive event, such as a shut-down ofthe TransAlaska Pipeline System, could have an adverse impact on the demand for our products and services and on our results of operationsand financial condition.Additionally, the customer base in Alaska is limited and we have already achieved significant market penetration with respect to our serviceofferings in Anchorage and other locations in Alaska. We may not be able to continue to increase our market share of the existing markets for ourservices, and no assurance can be given that the Alaskan economy will continue to grow and increase the size of the markets we serve orincrease the demand for the services we offer. As a result, the best opportunities for expanding our business may arise in other geographic areassuch as the lower 49 states. There can be no assurance that we will find attractive opportunities to grow our businesses outside of Alaska or thatwe will have the necessary expertise to take advantage of such opportunities. The markets in Alaska for wireless and wirelinetelecommunications and video services are unique and distinct within the United States due to Alaska’s large geographical size, its sparsepopulation located in a limited number of clusters, and its distance from the rest of the United States. The expertise we have developed inoperating our businesses in Alaska may not provide us with the necessary expertise to successfully enter other geographic markets.Natural disasters or terrorist attacks could have an adverse effect on our business.Our technical infrastructure (including our communications network infrastructure and ancillary functions supporting our network such as serviceactivation, billing and customer care) is vulnerable to damage or interruption from technology failures, power surges or outages, natural disasters,fires, human error, terrorism, intentional wrongdoing or similar events. As a communications provider, there is an increased risk that ourtechnological infrastructure may be targeted in connection with terrorism or cyber-attacks, either as a primary target, or as a means of facilitatingadditional attacks on other targets. In addition, earthquakes, floods, fires and other unforeseen natural disasters or events could materially disrupt our business operations or ourprovision of service in one or more markets. Costs we incur to restore, repair or replace our network or technical infrastructure, as well as costsassociated with detecting, monitoring or reducing the incidence of unauthorized use, may be substantial and increase our cost of providingservice. Any failure in or interruption of systems that we or third parties maintain to support ancillary functions, such as billing, point of sale,20Table of Contentsinventory management, customer care and financial reporting, could materially impact our ability to timely and accurately record, process andreport information important to our business. If any of the above events were to occur, we could experience higher churn, reduced revenues andincreased costs, any of which could harm our reputation and have a material adverse effect on our business, financial condition or results ofoperations.Additionally, our insurance may not be adequate to cover the costs associated with a natural disaster or terrorist attack.Cyber-attacks or other network disruptions could have an adverse effect on our business.Cyber-attacks on our technological infrastructure or breaches of network information technology may cause equipment failures, disruption of ouroperations, and potentially unauthorized access to confidential customer data. Cyber-attacks, which include the use of malware, computer viruses,and other means for service disruption or unauthorized access to confidential customer data, have increased in frequency, scope, and potentialharm for businesses in recent years. It is possible for such cyber-attacks to go undetected for a long period of time, increasing the potential harmto our subscribers, our assets, and our reputation.To date, we have not been subject to cyber-attacks or network disruptions that individually or in the aggregate, have been material to ouroperations or financial condition. Nevertheless, we engage in a variety of preventive measures at an increased cost to us, in order to reduce therisk of cyber-attacks and safeguard our infrastructure and confidential customer information. Such measures include, but are not limited to thefollowing industry best practices: application whitelisting, anti-malware, message and spam filtering, encryption, advanced firewalls, threatdetection, URL filtering, and encryption. Despite these preventive actions, our efforts may be insufficient to repel a major cyber-attack or networkdisruption in the future.Some of the most significant risks to our information technology systems, networks, and infrastructure include:•Disruptions, damage, or unauthorized access beyond our control, including disruptions or damage, or unauthorized access caused bycriminal or terrorist activities, theft, natural disasters, power surges, or equipment failure;•Human error;•Viruses, malware, worms, software defects, Trojan horses, unsolicited mass advertising, denial of service and other malicious or abusiveattacks by third parties, including cyber-attacks or other breaches of network or information technology security; and•Unauthorized access to our information technology, billing, customer care, and provisioning systems and networks and those of ourvendors and other providers.If hackers or cyberthieves gain improper access to our technology systems, networks, or infrastructure, they may be able to access, steal,publish, delete, misappropriate, or modify confidential customer data. Moreover, additional harm to customers could be perpetrated by third partieswho are given access to the confidential customer data. Relatedly, a network disruption (including one resulting from a cyber-attack) could causean interruption or degradation of service as well as permit access, theft, publishing, deletion, misappropriation, or modification to or of confidentialcustomer data. Due to the evolving techniques used in cyber-attacks to disrupt or gain unauthorized access to technology networks, we may notbe able to anticipate or prevent such disruption or unauthorized access.The costs imposed on us as a result of a cyber-attack or network disruption could be significant. Among others, such costs could includeincreased expenditures on cyber security measures, lost revenues from business interruption, litigation, fines, sanctions, and damage to thepublic’s perception regarding our ability to provide a secure service. As a result, a cyber-attack or network disruption could have a material adverseeffect on our business, financial condition, and operating results.Prolonged service interruptions or system failures could affect our business.We rely heavily on our network equipment, communications providers, data and software to support all of our functions. We rely on our networksand the networks of others for substantially all of our revenues. We are able to deliver services and serve our customers only to the extent that wecan protect our network systems against damage from power or communication failures, computer viruses, natural disasters, unauthorized accessand other disruptions. While we endeavor to provide for failures in the network by providing back-up systems and procedures,21Table of Contentswe cannot guarantee that these back-up systems and procedures will operate satisfactorily in an emergency. Disruption to our billing systems dueto a failure of existing hardware and backup protocols could have an adverse effect on our revenue and cash flow. Should we experience aprolonged failure, it could seriously jeopardize our ability to continue operations. In particular, should a significant service interruption occur, ourongoing customers may choose a different provider, and our reputation may be damaged, reducing our attractiveness to new customers.If failures occur in our undersea fiber optic cable systems or our TERRA facilities and its extensions, our ability to immediately restorethe entirety of our service may be limited and we could incur significant costs, which could lead to a material adverse effect on ourbusiness, financial position, results of operations or liquidity.Our communications facilities include undersea fiber optic cable systems that carry a large portion of our traffic to and from the contiguous lower48 states, one of which provides an alternative geographically diverse backup communication facility to the other. Our facilities also includeTERRA and its extensions which are unringed, operating in a remote environment and are at times difficult to access for repairs. If a failure ofboth sides of the ring of our undersea fiber optic facilities or of our unringed TERRA facility and its extensions occurs and we are not able tosecure alternative facilities, some of the communications services we offer to our customers could be interrupted which could have a materialadverse effect on our business, financial position, results of operations or liquidity. Damage to an undersea fiber optic cable system or TERRAand its extensions could result in significant unplanned expense which could have a material adverse effect on our business, financial position,results of operations or liquidity.If a failure occurs in our satellite communications systems, our ability to immediately restore the entirety of our service may be limited.Our communications facilities include satellite transponders that we use to serve many rural and remote Alaska locations. Each of our C-band andKu-band satellite transponders is backed up using on-board transponder redundancy. In the event of a complete spacecraft failure the servicesare restored using capacity on other spacecraft that are held in reserve. If a failure of our satellite transponders occurs and we are not able tosecure alternative facilities, some of the communications services we offer to our customers could be interrupted which could have a materialadverse effect on our business, financial position, results of operations or liquidity.We depend on a limited number of third-party vendors to supply communications equipment. If we do not obtain the necessarycommunications equipment, we will not be able to meet the needs of our customers.We depend on a limited number of third-party vendors to supply wireless, Internet, video and other telephony-related equipment. If our providers ofthis equipment are unable to timely supply the equipment necessary to meet our needs or provide them at an acceptable cost, we may not be ableto satisfy demand for our services and competitors may fulfill this demand. Due to the unique characteristics of the Alaska communicationsmarkets (i.e., remote locations, rural, satellite-served, low density populations, and our leading edge services and products), in many situations wedeploy and utilize specialized, advanced technology and equipment that may not have a large market or demand. Our vendors may not succeedin developing sufficient market penetration to sustain continuing production and may fail. Vendor bankruptcy, or acquisition without continuingproduct support by the acquiring company, may require us to replace technology before its otherwise useful end of life due to lack of on-goingvendor support and product development.The suppliers and vendors on which we rely may also be subject to litigation with respect to technology on which we depend, including litigationinvolving claims of patent infringement. Such claims have been growing rapidly in the communications industry. We are unable to predict whetherour business will be affected by any such litigation. We expect our dependence on key suppliers to continue as they develop and introduce moreadvanced generations of technology.22Table of ContentsWe do not have insurance to cover certain risks to which we are subject, which could lead to the occurrence of uninsured liabilities thatadversely affect our financial position, results of operations or liquidity.As is typical in the communications industry, we are self-insured for damage or loss to certain of our transmission facilities, including our buried,undersea and above-ground fiber optic cable systems. If we become subject to substantial uninsured liabilities due to damage or loss to suchfacilities, our financial position, results of operations or liquidity may be adversely affected.Our significant debt and capital lease obligations could adversely affect our business and prevent us from fulfilling our obligationsunder our Senior Notes, Senior Credit Facility, other debt or capital leases.We have and will continue to have a significant amount of debt and capital lease obligations. On December 31, 2014, we had total debt of$1,036.7 million and total capital lease obligations of $76.5 million. Additionally, on February 2, 2015, we completed the Wireless Acquisition whichwas funded with a $275.0 million Term B Loan under our Senior Credit Facility and a $75.0 million unsecured promissory note issued toSearchlight. Our high level of debt and capital lease obligations could have important consequences, including the following:•Increasing our vulnerability to adverse economic, industry, or competitive developments;•Requiring a substantial portion of our cash flows from operations to be dedicated to the payment of principal and interest on ourindebtedness, therefore reducing our ability to use our cash flows to fund operations, capital expenditures, and future businessopportunities;•Exposing us to the risk of increased interest rates to the extent of any future borrowings, including borrowings under the Senior CreditFacility, at variable rates of interest;•Making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Senior Notes and Senior CreditFacility, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowingconditions, could result in an event of default under the indenture governing the notes and the agreements governing such otherindebtedness;•Restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;•Limiting our ability to obtain additional financing for working capital, capital expenditures, product and service development, debt servicerequirements, acquisitions, and general corporate or other purposes; and•Limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitivedisadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage ofopportunities that our leverage may prevent us from exploiting.We will require a significant amount of cash to service our debt and to meet other obligations. Our ability to generate cash depends onmany factors beyond our control. If we are unable to meet our future capital needs it may be necessary for us to curtail, delay orabandon our business growth plans. If we incur significant additional indebtedness to fund our plans, it could cause a decline in ourcredit rating and could increase our borrowing costs or limit our ability to raise additional capital.We will continue to require a significant amount of cash to satisfy our debt service requirements and to meet other obligations. Our ability to makepayments on and to refinance our debt and to fund planned capital expenditures and acquisitions will depend on our ability to generate cash and toarrange additional financing in the future. These abilities are subject to, among other factors, our credit rating, our financial performance, generaleconomic conditions, prevailing market conditions, the state of competition in our market, the outcome of certain legislative and regulatory issuesand other factors that may be beyond our control. Our business may not generate sufficient cash flow from operations and future borrowings maynot be available to us in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs. We may need to refinance all or aportion of our debt on or before maturity. We may not be able to refinance any of our debt on commercially reasonable terms or at all.23Table of ContentsThe terms of our debt impose restrictions on us that may affect our ability to successfully operate our business and our ability to makepayments on the Senior Notes.The indentures governing our Senior Notes and/or the credit agreements governing our Senior Credit Facility and other loans contain variouscovenants that could materially and adversely affect our ability to finance our future operations or capital needs and to engage in other businessactivities that may be in our best interest.All of these covenants may restrict our ability to expand or to pursue our business strategies. Our ability to comply with these covenants may beaffected by events beyond our control, such as prevailing economic conditions and changes in regulations, and if such events occur, we cannot besure that we will be able to comply. A breach of these covenants could result in a default under the indentures governing our Senior Notes and/orthe Senior Credit Facility. If there were an event of default under the indentures for the Senior Notes and/or the Senior Credit Facility, holders ofsuch defaulted debt could cause all amounts borrowed under these instruments to be due and payable immediately. Additionally, if we fail torepay the debt under the Senior Credit Facility when it becomes due, the lenders under the Senior Credit Facility could proceed against certain ofour assets and capital stock of our subsidiaries that we have pledged to them as security. Our assets or cash flow may not be sufficient to repayborrowings under our outstanding debt instruments in the event of a default thereunder.When our Senior Credit Facility and Senior Notes mature, we may not be able to refinance or replace one or both.When out Senior Credit Facility and Senior Notes mature, we will likely need to refinance them and may not be able to do so on favorable terms orat all. If we are able to refinance maturing indebtedness, the terms of any refinancing or alternate credit arrangements may contain terms andcovenants that restrict our financial and operating flexibility.Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.Our borrowings under our Senior Credit Facility are at variable rates of interest and expose us to interest rate risk. If interest rates increase, ourdebt service obligations on the variable rate indebtedness could increase even though the amount borrowed remained the same, and our netincome and cash flow could decrease.In order to manage our exposure to interest rate risk, in the future we may enter into derivative financial instruments, typically interest rate swapsand caps, involving the exchange of floating for fixed rate interest payments. If we are unable to enter into interest rate swaps, it may adverselyaffect our cash flow and may impact our ability to make required principal and interest payments on our indebtedness.Any significant impairment of our indefinite-lived intangible assets would lead to a decrease in our assets and a reduction in our netoperating performance.We had $510.6 million of indefinite-lived intangible assets at December 31, 2014, consisting of goodwill of $229.6 million, cable certificates of$191.6 million, wireless licenses of $86.3 million and broadcast licenses of $3.1 million. Our cable certificates represent agreements withgovernment entities to construct and operate a video business. Our wireless licenses are from the FCC and give us the right to provide wirelessservice within a certain geographical area. Our broadcast licenses represent permission to use a portion of the radio frequency spectrum in agiven geographical area for broadcasting purposes. Goodwill represents the excess of cost over fair value of net assets acquired in connectionwith business acquisitions.If we make changes in our business strategy or if market or other conditions adversely affect our operations, we may be forced to record animpairment charge, which would lead to a decrease in our assets and a reduction in our net operating performance. Our indefinite-lived intangibleassets are tested annually for impairment during the fourth quarter and at any time upon the occurrence of certain events or substantive changesin circumstances that indicate the assets might be impaired. If the testing performed indicates that impairment has occurred, we are required torecord an impairment charge for the difference between the carrying value of the goodwill and/or the indefinite-lived intangible assets, asappropriate, and the fair value of the goodwill and/or indefinite-lived intangible assets, in the period in which the determination is made. The testingof goodwill and indefinite-lived intangible assets for impairment requires us to make significant estimates about our future performance and cashflows, as well as other assumptions. These estimates can be affected by numerous factors, including changes in economic,24Table of Contentsindustry or market conditions, changes in underlying business operations, future operating performance, changes in competition, or changes intechnologies. Any changes to key assumptions, or actual performance compared with those assumptions, about our business and its futureprospects or other assumptions could affect the fair value, resulting in an impairment charge.Our ability to use net operating loss carryforwards to reduce future tax payments could be negatively impacted if there is an “ownershipchange” as defined under Section 382 of the Internal Revenue Code.At December 31, 2014, we have tax net operating loss carryforwards of $320.3 million for U.S. federal income tax purposes and, under the InternalRevenue Code, we may carry forward these net operating losses in certain circumstances to offset any current and future taxable income and thusreduce our federal income tax liability, subject to certain requirements and restrictions. If we experience an “ownership change,” as defined inSection 382 of the Internal Revenue Code and related Treasury regulations at a time when our market capitalization is below a certain level, ourability to use the net operating loss carryforwards could be substantially limited. This limit could impact the timing of the usage of the net operatingloss carryforwards, thus accelerating cash tax payments or causing net operating loss carryforwards to expire prior to their use, which could affectthe ultimate realization of that deferred tax asset.Concerns about health risks associated with wireless equipment may reduce the demand for our wireless services.Portable communications devices have been alleged to pose health risks, including cancer, due to radio frequency emissions from thesedevices. Purported class actions and other lawsuits have been filed from time to time against other wireless companies seeking not onlydamages but also remedies that could increase the cost of doing business. We cannot be sure of the outcome of any such cases or that theindustry will not be adversely affected by litigation of this nature or public perception about health risks. The actual or perceived risk of mobilecommunications devices could adversely affect us through a reduction in subscribers. Further research and studies are ongoing, with no linkagebetween health risks and mobile phone use established to date by a credible public source. However, we cannot be sure that additional studieswill not demonstrate a link between radio frequency emissions and health concerns.A significant percentage of our voting securities are owned by a small number of shareholders and these shareholders can controlshareholder decisions on very important matters.As of December 31, 2014, our executive officers and directors and their affiliates owned 13% of our combined outstanding Class A and Class Bcommon stock, representing 23% of the combined voting power of that stock. These shareholders can significantly influence, if not control, ourmanagement policy and all fundamental corporate actions, including mergers, substantial acquisitions and dispositions, and election of directors tothe Board.We invest in early-stage, venture backed companies. The companies in which we invest are entrants to markets with new products or services. These companies generally have revenue that does notcover the companies’ operating and capital expenditures. As a result, the companies typically operate with monthly net losses and may requireadditional funding for operating and capital. Given that, among other things, these companies are at an early stage in their life cycle and are oftenproving their business model, these companies may fail, go bankrupt, and lose all or substantially all of their value which could have an adverseeffect on our financial position, results of operations or liquidity.Item 1B. Unresolved Staff Comments.Not applicable.Item 2. PropertiesOur properties do not lend themselves to description by location of principal units. The majority of our properties are located in Alaska. 25Table of ContentsWe lease most of our executive, corporate and administrative facilities and business offices. Our operating, executive, corporate andadministrative properties are in good condition. We consider our properties suitable and adequate for our present needs and they are being fullyutilized.Our Wireline and Wireless segments have properties that consist primarily of undersea and terrestrial fiber optic cable networks, switchingequipment, satellite transponders and earth stations, microwave radio, cable and wire facilities, cable head-end equipment, wireless towers andequipment, coaxial distribution networks, connecting lines (aerial, underground and buried cable), routers, servers, transportation equipment,computer equipment, general office equipment, land, land improvements, landing stations and other buildings. Substantial amounts of ourproperties are located on or in leased real property or facilities. Substantially all of our properties secure our Senior Credit Facility. See note 6included in “Part II — Item 8 — Consolidated Financial Statements and Supplementary Data” for more information.Item 3. Legal ProceedingsWe are involved in various lawsuits, billing disputes, legal proceedings, and regulatory matters that have arisen from time to time in the normalcourse of business. Management believes there are no proceedings from asserted and unasserted claims which if determined adversely wouldhave a material adverse effect on our financial position, results of operations or liquidity. Item 4. Mine Safety DisclosuresNot Applicable.Part IIItem 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecuritiesMarket Information for Common StockShares of GCI’s Class A common stock are traded on the Nasdaq Global Select MarketSM under the symbol GNCMA.Shares of GCI’s Class B common stock are traded through the Over-The-Counter Bulletin Board service offered by the National Association ofSecurities Dealers. Each share of Class B common stock is convertible, at the option of the holder, into one share of Class A common stock.The following table sets forth the high and low sales price for our common stock for the periods indicated. Market price data for Class A shareswas obtained from the Nasdaq Stock Market System quotation system. Market price data for Class B shares was obtained from reported Over-the-Counter Bulletin Board service market transactions. The prices represent prices between dealers, do not include retail markups, markdowns,or commissions, and do not necessarily represent actual transactions. Class A Class B High Low High Low2014 First Quarter$11.62 9.34 11.48 10.50Second Quarter$11.49 10.31 11.02 10.57Third Quarter$11.63 10.83 11.02 10.61Fourth Quarter$13.84 10.69 13.73 10.612013 First Quarter$9.51 7.97 8.89 7.50Second Quarter$9.82 7.69 8.29 7.50Third Quarter$9.60 8.44 9.09 8.29Fourth Quarter$11.18 8.78 10.96 8.7526Table of ContentsHoldersAs of December 31, 2014, there were 2,331 holders of record of our Class A common stock and 304 holders of record of our Class B commonstock (amounts do not include the number of shareholders whose shares are held of record by brokers, but do include the brokerage house as oneshareholder).DividendsWe have never paid cash dividends on our common stock, and we have no present intention of doing so. Payment of cash dividends in the future,if any, will be determined by our Board of Directors in light of our earnings, financial condition and other relevant considerations. Our existing debtagreements contain provisions that limit payment of dividends on common stock, other than stock dividends (see note 6 included in “Part II —Item 8 — Consolidated Financial Statements and Supplementary Data” for more information).Stock Transfer Agent and RegistrarComputershare is our stock transfer agent and registrar.Performance GraphThe following graph includes a line graph comparing the yearly percentage change in our cumulative total shareholder return on our Class Acommon stock during the five-year period 2010 through 2014. This return is measured by dividing (1) the sum of (a) the cumulative amount ofdividends for the measurement period (assuming dividend reinvestment, if any) and (b) the difference between our share price at the end and thebeginning of the measurement period, by (2) the share price at the beginning of that measurement period. This line graph is compared in thefollowing graph with two other line graphs during that five-year period, i.e., a market index and a peer index.The market index is the Center for Research in Securities Price Index for the Nasdaq Stock Market for United States companies. It presentscumulative total returns for a broad based equity market assuming reinvestment of dividends and is based upon companies whose equitysecurities are traded on the Nasdaq Stock Market. The peer index is the Center for Research in Securities Price Index for NasdaqTelecommunications Stock. It presents cumulative total returns for the equity market in the telecommunications industry segment assumingreinvestment of dividends and is based upon companies whose equity securities are traded on the Nasdaq Stock Market. The line graphsrepresent annual index levels derived from compounding daily returns.In constructing each of the line graphs in the following graph, the closing price at the beginning point of the five-year measurement period has beenconverted into a fixed investment, stated in dollars, in our Class A common stock (or in the stock represented by a given index, in the cases ofthe two comparison indexes), with cumulative returns for each subsequent fiscal year measured as a change from that investment. Data for eachsucceeding fiscal year during the five-year measurement period are plotted with points showing the cumulative total return as of that point. Thevalue of a shareholder’s investment as of each point plotted on a given line graph is the number of shares held at that point multiplied by the thenprevailing share price.Our Class B common stock is traded through the Over-The-Counter Bulletin Board service on a more limited basis. Therefore, comparisonssimilar to those previously described for the Class A common stock are not directly available. However, the performance of Class B commonstock may be analogized to that of the Class A common stock in that the Class B common stock is readily convertible into Class A commonstock upon request to us.27Table of ContentsPrepared by Zacks Investment Research, Inc. All indexes used with permission. All rights reserved.COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS PERFORMANCE GRAPH FOR GENERAL COMMUNICATION, INC.,NASDAQ STOCK MARKET INDEX FOR UNITED STATES COMPANIES, AND NASDAQ TELECOMMUNICATIONS STOCK1,2,3,4Measurement Period (Fiscal YearCovered)Company ($)Nasdaq Stock Market Index forU.S. Companies ($)Nasdaq Telecommunications Stock($)FYE 12/31/09100.00100.00100.00FYE 12/31/10198.43118.37129.12FYE 12/31/11153.45118.98136.53FYE 12/31/12150.31140.70184.47FYE 12/31/13174.76196.11267.65FYE 12/31/14215.52226.12281.291 The lines represent annual index levels derived from compounded daily returns that include all dividends.2 The indexes are reweighted daily, using the market capitalization on the previous trading day.3 If the annual interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.4 The index level for all series was set to $100.00 on December 31, 2009.Issuer’s Purchases of Equity Securities(a) Not applicable.(b) Not applicable.28Table of Contents(c) The following table provides information about repurchases of shares of our Class A common stock during the quarter ended December 31,2014 (amounts rounded to hundreds, except per share amounts): (a) Total Number of SharesPurchased1(b) Average Price Paid perShare(c) Total Number of SharesPurchased as Part ofPublicly Announced Plansor Programs2(d) Maximum Number (orapproximate Dollar Value) ofShares that May Yet BePurchased Under the Planor Programs3October 1, 2014 to October31, 2014267,100$10.92265,700$122,103,100November 1, 2014 toNovember 30, 2014129,300$12.18—$122,114,600December 1, 2014 toDecember 31, 201428,600$13.51700$122,217,000Total425,000 1 Consists of 265,700 shares from open market purchases made under our publicly announced repurchase plan, 700 shares from privatepurchases made under our publicly announced plan and 158,600 shares from private purchases made to settle the minimum statutory tax-withholding requirements pursuant to restricted stock award vesting.2 The repurchase plan was publicly announced on November 3, 2004. Our plan does not have an expiration date, however transactionspursuant to the plan are subject to periodic approval by our Board of Directors. We expect to continue the repurchases for an indefinite perioddependent on leverage, liquidity, company performance, market conditions and subject to continued oversight by our Board of Directors.3 The total amount approved by our Board of Directors for repurchase under our publicly announced repurchase plan was $358.4 million throughDecember 31, 2014, consisting of $353.3 million through September 30, 2014, and an additional $5.1 million during the three months endedDecember 31, 2014. We have made total repurchases under the program of $236.2 million through December 31, 2014. If stock repurchasesare less than the total approved quarterly amount the difference may be carried forward and used to repurchase additional shares in futurequarters, subject to board approval. 29Table of ContentsItem 6. Selected Financial DataThe following table presents selected historical information relating to financial condition and results of operations over the past five years. Years Ended December 31, 2014 2013 2012 2011 2010(Amounts in thousands except per shareamounts) Revenues$910,198 811,648 710,181 679,381 651,250Income before income taxes$69,273 42,684 21,250 12,891 17,858Net income$59,244 31,727 9,162 5,486 8,610Net income (loss) attributable to non-controlling interest$51,687 22,321 (511) (238) —Net income attributable to GCI commonstockholders$7,557 9,406 9,673 5,724 8,610Basic net income attributable to GCI percommon share$0.18 0.23 0.23 0.13 0.16Diluted net income attributable to GCI percommon share$0.18 0.23 0.23 0.12 0.16Total assets$2,058,498 2,011,807 1,506,552 1,446,320 1,350,353Long-term debt, including current portion andnet of unamortized discount$1,036,678 1,047,980 877,051 861,272 781,717Obligations under capital leases, includingcurrent portion$76,456 74,605 80,612 86,054 91,165Redeemable preferred stock Series B$— — — — —Series C$— — — — —Total GCI stockholders’ equity$167,356 157,144 157,178 157,339 199,099Dividends declared per common share$— — — — —The Selected Financial Data should be read in conjunction with “Part II — Item 7 — Management’s Discussion and Analysis of Financial Conditionand Results of Operations.”Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsIn the following discussion, General Communication, Inc. (“GCI”) and its direct and indirect subsidiaries are referred to as “we,” “us” and “our.”Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, whichhave been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation ofthese financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and thedisclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses duringthe reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to the allowance for doubtfulreceivables, unbilled revenues, accrual of the USF high cost Remote area program support, share-based compensation, inventory at lower of costor market, reserve for future customer credits, liability for incurred but not reported medical insurance claims, valuation allowances for deferredincome tax assets, depreciable and amortizable lives of assets, the carrying value of long-lived assets including goodwill, cable certificates,wireless licenses, and broadcast licenses, our effective tax rate, purchase price allocations, deferred lease expense, asset retirement obligations,the accrual of cost of goods sold (exclusive of depreciation and amortization expense) ("Cost of Goods Sold"), depreciation, and accrual ofcontingencies and litigation. We base our estimates and judgments on historical experience and on various other factors that are believed to be30Table of Contentsreasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilitiesthat are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Seealso our “Cautionary Statement Regarding Forward-Looking Statements.”The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financialstatements and supplementary data as presented in Part IV of this Form 10-K.General OverviewThrough our focus on long-term results, acquisitions, and strategic capital investments, we strive to consistently grow our revenues and expandour margins. We have historically met our cash needs for operations, regular capital expenditures and maintenance capital expenditures throughour cash flows from operating activities. Historically, cash requirements for significant acquisitions and major capital expenditures have beenprovided largely through our financing activities.As discussed earlier in “Item 1 — Business — Geographic Concentration and the Alaska Economy,” our revenue is impacted by the strength ofthe Alaska economy. The Alaska economy is affected by certain economic factors including activity in the oil and gas industry, tourism,government spending, and military personnel stationed in Alaska. A long-term decrease in oil prices may impact spending by the oil and gasindustry and the government, which could negatively impact our revenue. Additionally, the health of the national economy can impact our revenue.On July 22, 2013, we closed the transactions under the Asset Purchase and Contribution Agreement ("Wireless Agreement") and other relatedagreements entered into on June 4, 2012 by and among ACS, GCI, ACS Wireless, Inc., a wholly owned subsidiary of ACS, GCI WirelessHoldings, LLC, a wholly owned subsidiary of GCI, and AWN, pursuant to which the parties agreed to contribute the respective wireless networkassets of GCI, ACS and their affiliates to AWN. This transaction provided a statewide network with the spectrum mix, scale, advanced technologyand cost structure necessary to compete with Verizon Wireless and AT&T Mobility in Alaska. Until the closing of the Wireless Acquisitiondescribed below, AWN provided wholesale services to GCI and ACS, and GCI and ACS used the AWN network to continue to sell services to theirrespective retail customers.Under the terms of the Wireless Agreement, we contributed our wireless network assets and certain rights to use capacity to AWN. Additionally,ACS contributed its wireless network assets and certain rights to use capacity to AWN. As consideration for the contributed business assets andliabilities, ACS received $100.0 million in cash from GCI, a one-third ownership interest in AWN, and preferential cash distributions totaling $50.0million and $22.0 million in 2014 and 2013, respectively. As part of closing, we borrowed $100.0 million under our Senior Credit Facility to fund thepurchase of wireless network assets from ACS.On February 2, 2015, we completed the transaction to purchase ACS' wireless subscriber base and its one-third ownership interest in AWN for$293.2 million, subject to possible post-closing adjustments ("Wireless Acquisition"). Following the close of the Wireless Acquisition, AWN is awholly owned subsidiary and we are entitled to 100% of the future cash flows from AWN. We funded the purchase with a $275.0 million Term Bloan under our Senior Credit Facility and a $75.0 million unsecured promissory note from Searchlight. We expect to record costs of approximately$30.0 million in 2015 for one-time customary transaction costs and costs to migrate a billing system, train our customer service representatives,and to transition a portion of our new customers to our GSM network.ACS reported approximately 109,000 wireless subscribers as of September 30, 2014. The actual number of wireless subscribers in good standingthat we acquired on February 2, 2015 was approximately 87,000 due to a numbers of factors including subsequent subscriber losses, differencesin methods of counting subscribers, and the exclusion of internal subscribers from the transaction. These numbers are preliminary and will befinalized during the first quarter of 2015. We expect the impact of the lower number of subscribers to be minimal as these subscribers had a lowaverage revenue per user, reduced future phone subsidies, and an estimated $4.4 million reduction to the purchase price related to the subscriberattrition.As an ETC, we receive support from the USF to support the provision of wireline local access and wireless service in high cost areas. OnNovember 29, 2011, the FCC published final rules to reform, among others, the methodology for distributing USF high cost support for voice andbroadband services (“High Cost Order”). The High Cost Order segregated the support methodology for Remote areas in Alaska from the supportmethodology for all urban areas,31Table of Contentsincluding Alaska Urban locations. Our future revenue recognition for both Remote and Urban high cost support is dependent upon the functionalityand timing of an operational successor funding mechanism. Rulemaking is underway to consider a successor funding mechanism. We cannotpredict at this time the outcome of this proceeding or its effect on Remote high cost support available to us, but our revenue for providing servicesin these areas would be materially adversely affected by a substantial reduction of USF support.Results of OperationsThe following table sets forth selected financial data as a percentage of total revenues for the periods indicated (underlying data rounded to thenearest thousand): Year Ended December 31,PercentageChange1 2014 vs.2013PercentageChange1 2013 vs.2012 201420132012Statements of Operations Data: Revenues: Wireless segment30%24%18%37%58%Wireline segment70%76%82%4%5%Total revenues100%100%100%12%14%Selling, general and administrative expenses32%33%34%8%11%Depreciation and amortization expense19%18%18%16%13%Operating income16%14%13%27%27%Other expense, net8%9%10%6%4%Income before income taxes8%5%3%62%101%Net income7%4%1%87%246%Net income (loss) attributable to the non-controlling interest6%3%—%132%4,468%Net income attributable to GCI1%1%1%(20)%(3)% 1 Percentage change in underlying data We evaluate performance and allocate resources based on earnings before depreciation and amortization expense, net interest expense, incometaxes, share-based compensation expense, accretion expense, income or loss attributable to non-controlling interest, non-cash contributionadjustment, and other non-cash adjustments (“Adjusted EBITDA”). Management believes that this measure is useful to investors and other usersof our financial information in evaluating operating profitability as an analytical indicator of income generated to service debt and fund capitalexpenditures. In addition, multiples of current or projected earnings before depreciation and amortization expense, net interest expense andincome taxes (“EBITDA”) are used to estimate current or prospective enterprise value. See note 10 in the "Notes to Consolidated FinancialStatements" included in Part IV of this annual report on Form 10-K for a reconciliation of consolidated Adjusted EBITDA, a non-GAAP financialmeasure, to consolidated income before income taxes.Overview of Revenues and Cost of Goods SoldTotal revenues increased 14% from $710.2 million in 2012 to $811.6 million in 2013 and increased 12% to $910.2 million in 2014. Revenueincreased in both of our segments in 2014 and 2013. See the discussion below for more information by segment.Total Cost of Goods Sold increased 13% from $247.5 million in 2012 to $280.5 million in 2013 and increased 8% to $302.7 million in 2014. Cost ofGoods Sold decreased in our Wireline segment and increased in our Wireless segment for 2014. Cost of Goods Sold increased in both of oursegments in 2013. See the discussion below for more information by segment.32Table of ContentsWireless Segment OverviewWireless segment revenue, Cost of Goods Sold, and Adjusted EBITDA are as follows (amounts in thousands): 201420132012PercentageChange 2014 vs.2013PercentageChange 2013 vs.2012Revenue$269,977197,218124,74537%58%Cost of Goods Sold$90,92068,08658,73734%16%Adjusted EBITDA$158,159109,60950,80244%116%See note 10 in the "Notes to Consolidated Financial Statements" included in Part IV of this annual report on Form 10-K for a reconciliation ofconsolidated Adjusted EBITDA, a non-GAAP financial measure, to consolidated income before income taxes.Wireless Segment RevenuesThe increase in revenue is primarily due to the following:•A $29.1 million and $41.9 million increase in roaming revenue in 2014 and 2013, respectively, primarily due to the July 22, 2013 close ofthe initial AWN transaction,•A $27.0 million and $25.0 million increase in non-Lifeline wholesale plan fee revenue in 2014 and 2013, respectively, primarily due to theJuly 22, 2013 close of the initial AWN transaction and an increase in wireless subscribers, •A $11.7 million and $9.7 million increase in high cost support in 2014 and 2013, respectively, primarily due to the July 22, 2013 close ofthe initial AWN transaction,•A $7.3 million and $2.9 million increase in private line revenue in 2014 and 2013, respectively, due to increased demand for backhaulcapacity.The increase is partially off-set by a $2.5 million and $6.6 million increase in the wireless handset cash incentives to ACS in 2014 and 2013,respectively, for the sale of wireless handsets to their retail customers due to the July 22, 2013 close of the initial AWN transaction.Wireless Segment Cost of Goods SoldThe increase in Cost of Goods Sold is primarily due to the following:•A $11.3 million and $7.3 million increase in 2014 and 2013, respectively, primarily due to roaming costs due to the July 22, 2013 closeof the initial AWN transaction,•A $5.1 million increase in wireless equipment costs in 2014. During the period from April 1, 2014 to December 31, 2014, the Wirelesssegment recorded the Cost of Goods Sold related to wireless equipment sales to retail customers based upon equipment sales andagreed-upon subsidy rates. Any amount in excess of this subsidy was recorded in the Wireline segment. From the July 22, 2013 closeof the initial AWN transaction through March 31, 2014, although permitted, the Wireline segment was unable to meet the requirements inorder to request a wireless equipment subsidy from the Wireless segment in accordance with the AWN agreements, and•A $1.9 million and $5.5 million increase in distribution and capacity costs in 2014 and 2013, respectively, due to the July 22, 2013 closeof the initial AWN transaction and growth in traffic carried on the wireless network,•Additional increases in network maintenance costs in 2014 and 2013 due to the growth of the wireless network due to the July 22, 2013close of the initial AWN transaction and increased emphasis on our wireless network.The increase in 2013 is partially off-set by an $11.0 million decrease in wireless equipment costs. Through the initial AWN transaction close theWireless segment recorded the Cost of Goods Sold related to wireless equipment sales to retail customers based upon equipment sales andagreed-upon subsidy rates. Any amount in excess of this subsidy was recorded in the Wireline segment. Subsequent to the transaction close andthrough March 31, 2014, although permitted, the Wireline segment was unable to meet the requirements in order to request a wireless equipmentsubsidy from the Wireless segment in accordance with the AWN agreements.33Table of ContentsWireless Segment Adjusted EBITDAThe increases in Adjusted EBITDA in 2014 and 2013 are primarily due to increased revenue as described above in “Wireless Segment Revenues.”This increases were partially offset by increased Cost of Goods Sold as described above in "Wireless Segment Cost of Goods Sold" and anincrease in selling, general and administrative expense.Wireline Segment OverviewOur Wireline segment offers services and products under three major customer groups as follows: Customer GroupWireline Segment Services and ProductsConsumerBusinessServicesManagedBroadband Retail wirelessXX Data: InternetXXX Data networks XX Managed services XX VideoXX Voice: Long-distanceXXX Local accessXXX•Consumer – we offer a full range of retail wireless, data, video and voice services to residential customers.•Business Services - we offer a full range of retail wireless, data, video and voice services to businesses, governmental entities,educational institutions and wholesale data and voice services to common carrier customers.•Managed Broadband – we offer Internet, data network and managed services to rural schools and health organizations and regulatedvoice services to residential and commercial customers in rural communities primarily in Southwest Alaska.34Table of ContentsThe components of Wireline segment revenue are as follows (amounts in thousands): 201420132012PercentageChange 2014 vs.2013PercentageChange 2013 vs.2012Consumer Wireless$30,99828,03126,41611 %6 %Data113,30699,74086,46614 %15 %Video111,175111,368115,306— %(3)%Voice32,53535,66641,169(9)%(13)%Business Services Wireless2,7492,8722,881(4)%— %Data144,945154,498143,907(6)%7 %Video33,25915,17112,842119 %18 %Voice45,01050,27348,262(10)%4 %Managed Broadband Data105,00495,64586,56210 %10 %Voice21,24021,16621,625— %(2)%Total Wireline segment revenue$640,221614,430585,4364 %5 %Wireline segment Cost of Goods Sold and Adjusted EBITDA are as follows (amounts in thousands): 201420132012PercentageChange 2014 vs.2013PercentageChange 2013 vs.2012Wireline segment Cost of Goods Sold$211,784212,376188,764— %13 %Wireline segment Adjusted EBITDA$164,957157,674176,0075 %(10)%See note 10 in the "Notes to Consolidated Financial Statements" included in Part IV of this annual report on Form 10-K for a reconciliation ofconsolidated Adjusted EBITDA, a non-GAAP financial measure, to consolidated income before income taxes.Selected key performance indicators for our Wireline segment follow: 201420132012PercentageChange 2014 vs.2013PercentageChange 2013 vs.2012Consumer Data: Cable modem subscribers1119,100115,300115,6003 %— %Video: Basic subscribers2 116,400117,900122,300(1)%(4)%Digital programming tier subscribers3 63,80067,50072,500(5)%(7)%HD/DVR converter boxes4 108,40096,90090,40012 %7 %Homes passed248,200247,400243,600— %2 %Video ARPU5 $79.29$77.34$77.983 %(1)%Voice: Total local access lines in service6 54,60061,00069,700(10)%(12)%Business Services 35Table of ContentsData: Cable modem subscribers1 14,10014,00013,3001 %5 %Voice: Total local access lines in service6 47,40048,80051,600(3)%(5)%Combined Consumer and Business Services Multiple System Operator Operating Statistics Customer relationships7120,400122,400126,700(2)%(3)%Revenue generating units8330,200334,100343,900(1)%(3)%Wireless Consumer Lifeline wireless lines in service925,00029,30032,400(15)%(10)%Consumer Non-Lifeline wireless lines in service10 106,40093,60090,60014 %3 %Business Services Non-Lifeline wireless lines in service1018,20018,60017,000(2)%9 %Total wireless lines in service149,600141,500140,0006 %1 %Wireless ARPU11$49.97$48.71$45.473 %7 %Cable modem ARPU12$78.87$70.50$64.1012 %10 %1 A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased. If one entitypurchases multiple cable modem service access points, each access point is counted as a subscriber. Cable modem subscribers may also bevideo basic subscribers though basic video service is not required to receive cable modem service.2 A basic subscriber is defined as one basic tier of service delivered to an address or separate subunits thereof regardless of the number of outletspurchased.3 A digital programming tier subscriber is defined as one digital programming tier of service delivered to an address or separate subunits thereofregardless of the number of outlets or digital programming tiers purchased. Digital programming tier subscribers are a subset of basic subscribers.4 A high-definition/digital video recorder ("HD/DVR") converter box is defined as one box rented by a digital programming or basic tier subscriber. Adigital programming or basic tier subscriber is not required to rent an HD/DVR converter box to receive service.5 Applicable average monthly video revenues divided by the average number of basic subscribers at the beginning and end of each month in 2014,2013, and 2012.6 A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephonenetwork.7 The number of customers that receive at least one level of service utilizing our cable service facilities, encompassing voice, video, and dataservices, without regard to which services customers purchase.8 The sum of all primary digital video, high-speed data, and telephony customers, not counting additional outlets.9 A Lifeline wireless line in service is defined as a revenue generating wireless device that is eligible for Lifeline support. The Universal ServiceFund's Lifeline program is administered by the Universal Service Administrative Company and is designed to ensure that qualitytelecommunications services are available to low-income customers at affordable rates.10 A non-Lifeline wireless line in service is defined as a revenue generating wireless device that is not eligible for Lifeline support.11 Average monthly wireless revenues, excluding those from other wireless carrier customers, divided by the average of wireless subscribers atthe beginning and end of each month in the period ("Wireless ARPU"). Revenue used for this calculation includes Wireline segment - Consumer -Wireless, Wireline segment - Business Services - Wireless and wholesale wireless revenues earned from GCI retail subscribers included in theWireless segment for 2014, 2013, and 2012.12 Applicable average monthly cable modem revenues divided by the average number of subscribers at the beginning and end of each month in2014, 2013, and 2012.36Table of ContentsWireline Segment RevenuesConsumerThe increase in data revenue is primarily due to a $12.1 million or 14% and $12.2 million or 16% increase in cable modem revenue for 2014 and2013, respectively, due to an increase in the average number of subscribers in 2014 and our subscribers’ selection of plans that offer higherspeeds and higher usage limits in 2014 and 2013.Business ServicesBusiness Services data revenue is comprised of monthly recurring charges for data services and charges billed on a time and materials basislargely for personnel providing on-site customer support. This latter category can vary significantly based on project activity.The decrease in data revenue in 2014 is primarily due to a $14.1 million or 24% decrease in managed services project revenue due to a decreasein special project work. The decrease in 2014 is partially offset by a $4.6 million or 5% increase in data transport and storage revenue due toincreased demand for increased capacity and data speeds. The increase in data revenue in 2013 is primarily due to a $10.2 million or 20% inmanaged services project revenue due to special project work.The $18.1 million or 119% increase in video revenue in 2014 primarily results from an increase in advertising sales due to the election cycle andour acquisition of the television broadcast stations in the fourth quarter of 2013.Managed BroadbandThe increase in data revenue in 2014 and 2013 is primarily due to a $10.2 million or 11% and $12.3 million or 15% increase in monthly contractrevenue in 2014 and 2013, respectively, due to new ConnectMD® and SchoolAccess® customers and increased data network capacity purchasedby our existing ConnectMD® and SchoolAccess® customers due to increased demand.Wireline Segment Cost of Goods SoldThe individually significant items contributing to the 2014 and 2013 increases in Wireline segment Cost of Goods Sold include:•A 17% or $10.0 million and 10% or $5.3 million increase in video Cost of Goods Sold in 2014 and 2013, respectively, primarily due to theacquisition of the television broadcast stations in the fourth quarter of 2013 and increased rates paid to programmers,•A 28% or $10.8 million increase in managed services project Cost of Goods Sold for 2013 related to the increased special project workdescribed above in “Wireline Segment Revenues – Business Services,"•A 11% or $2.7 million and 102% or $12.5 million increase in 2014 and 2013 wireless device Cost of Goods Sold, respectively, primarilydue to an increase in the number of handsets sold and in 2013 a decrease in subsidies received from the Wireless segment for thepurchase of wireless handsets. The increase in 2014 was partially off-set by an increase in the subsidy. Through the initial AWNtransaction close the Wireless segment recorded the Cost of Goods Sold related to wireless equipment sales to retail customers basedupon equipment sales and agreed-upon subsidy rates. Any amount in excess of this subsidy was recorded in the Wireline segment.Subsequent to the transaction close and through March 31, 2014, although permitted, the Wireline segment was unable to meet therequirements in order to request a wireless equipment subsidy from the Wireless segment in accordance with the AWN agreements.The increases are partially offset by the following individually significant items:•A 23% or $11.5 million decrease in managed services project Cost of Goods Sold for 2014 related to the decreased special project workdescribed above in "Wireline Segment Revenues - Business Services," and•A 9% or $3.1 million decrease in voice Cost of Goods Sold for 2013 due to the continuing decrease in long distance and local servicesubscribers.37Table of ContentsWireline Segment Adjusted EBITDAThe increase in Adjusted EBITDA for 2014 is primarily due to an increase in revenues as described above in "Wireline Segment Revenues"partially offset by an increase in Cost of Goods Sold as described above in "Wireline Segment Cost of Goods Sold" and selling, general andadministrative expense. The decrease in Adjusted EBITDA for 2013 is primarily due to an increase in Cost of Goods Sold as described above in"Wireline Segment Cost of Goods Sold" and selling, general and administrative expense partially offset by an increase in revenues as describedabove in "Wireline Segment Revenues."Selling, General and Administrative ExpensesSelling, general and administrative expenses increased $22.6 million to $293.6 million for 2014 and $27.8 million to $271.1 million for2013. Individually significant items contributing to the increases include:•A $10.7 million and $9.1 million increase in labor costs for 2014 and 2013, respectively,•A $4.3 million increase in healthcare costs for 2014,•A $2.8 million increase in our company-wide success sharing bonus accrual for 2013,•A $2.3 million increase in contract labor related to non-capitalizable network projects for our ConnectMD® and SchoolAccess®customers for 2013,•A $2.5 million increase due to an increased usage of contract labor by our operating departments for 2013, and•$1.8 million in transaction costs in 2013 related to the AWN transaction that closed in 2013.As a percentage of total revenues, selling, general and administrative expenses were 32%, 33%, and 34% of revenue for 2014, 2013, and 2012,respectively.Depreciation and Amortization ExpenseDepreciation and amortization expense increased $23.0 million to $170.3 million and $16.8 million to $147.3 million in 2014 and 2013,respectively. The increases in 2014 and 2013 are primarily due to new assets placed in service in those years partially offset by assets whichbecame fully depreciated during those years. Additionally, we recorded an increase of $8.7 million and $8.8 million of depreciation and amortizationexpense in 2014 and 2013, respectively, for the assets acquired from ACS as part of the AWN transaction.Other Expense, NetOther expense, net of other income, increased $4.1 million to $74.3 million in 2014 and $2.4 million to $70.2 million in 2013. The increases in 2014and 2013 are primarily due to increased interest expense attributable to increased borrowing on our Senior Credit Facility.Income Tax ExpenseIncome tax expense totaled $10.0 million, $11.0 million, and $12.1 million in 2014, 2013, and 2012, respectively. Our effective income tax rate was14%, 26%, and 57% in 2014, 2013, and 2012, respectively. Our effective income tax rate decreased in 2014 and 2013 due to the inclusion ofincome attributable to the non-controlling interest in AWN in income before income tax expense as of the transaction close in July 2013.At December 31, 2014, we have income tax net operating loss carryforwards of $320.3 million that will begin expiring in 2020 if not utilized, andalternative minimum tax credit carryforwards of $1.7 million available to offset regular income taxes payable in future years.We have recorded deferred tax assets of $132.0 million associated with income tax net operating losses that were generated from 2000 to 2014and that expire from 2020 to 2034, respectively, and with charitable contributions that were converted to net operating losses in 2004 through 2007,2013, and 2014 and that expire in 2024 through 2027, 2033, and 2034, respectively.Tax benefits associated with recorded deferred tax assets are considered to be more likely than not realizable through future reversals of existingtemporary differences and future taxable income exclusive of reversing temporary differences and carryforwards. The amount of deferred taxassets considered realizable, however, could be reduced if estimates of future taxable income during the carryforward period are reduced whichwould result in additional income tax expense. We estimate that our effective annual income tax rate for financial statement purposes will be 43%to 48% in the year ending December 31, 2015. The effective rate is expected to increase due38Table of Contentsto the completion on February 2, 2015, of the transaction to purchase ACS' one-third ownership interest in AWN. Our effective income tax rate waslower in 2014 due to the inclusion of income attributable to the noncontrollinginterest in AWN in income before income tax expense and the exclusion of income taxes on incomeattributable to the non-controlling interest in AWN.Liquidity and Capital ResourcesOur principal sources of current liquidity are cash and cash equivalents. We believe, but can provide no assurances, that we will be able to meetour current and long-term liquidity, capital requirements and fixed charges through our cash flows from operating activities, existing cash, cashequivalents, credit facilities, and other external financing and equity sources. Should operating cash flows be insufficient to support additionalborrowings and principal payments scheduled under our existing credit facilities, capital expenditures will likely be reduced, which would likelyreduce future revenues.As discussed in the General Overview section of this Item 2, on July 22, 2013, we closed the initial AWN transaction. Under the terms of theWireless Agreement, we contributed our wireless network assets and certain rights to use capacity to AWN. Additionally, ACS contributed itswireless network assets and certain rights to use capacity to AWN. As consideration for the contributed assets and liabilities, ACS received$100.0 million in cash from GCI, a one-third ownership percentage in AWN, and $50.0 million and $22.0 million in cash distributions in 2014 and2013, respectively. We funded the purchase by borrowing $100.0 million under our Senior Credit Facility on July 17, 2013. On February 2, 2015, we completed the Wireless Acquisition to purchase ACS' wireless subscriber base and its one-third ownership interest inAWN for $293.2 million, subject to possible post-closing adjustments. Following the close of the transaction, AWN is our wholly owned subsidiaryand we are entitled to 100% of the future cash flows from AWN.To fund the 2015 purchase from ACS, on February 2, 2015 GCI Holdings, Inc. entered into a Fourth Amended and Restated Credit and GuaranteeAgreement with Credit Agricole Corporate and Investment Bank, as administrative agent, that included $275.0 million of a Term B Loan. Theinterest rate under the Term B Loan is LIBOR plus 3.75%, with a 1% LIBOR floor. The Term B Loan will mature on February 2, 2022 or December3, 2020 if our Senior Notes due 2021 are not refinanced prior to such date. We also sold an unsecured promissory note to Searchlight in theprincipal amount of $75.0 million that will mature on February 2, 2023 and will bear interest at a rate of 7.5% per year ("Searchlight Note"). Aportion of the proceeds from the Searchlight Note were used to finance the Wireless Acquisition and the remainder will be used for generalcorporate purposes. Additionally, we entered into a Stock Appreciation Rights Agreement pursuant to which we issued to Searchlight three millionstock appreciation rights which entitles Searchlight to receive, upon exercise, an amount payable at our election in either cash or shares of GCI'sClass A common stock equal in value to the excess of the fair market value of a share of GCI Class A common stock on the date of exerciseover the price of $13.00.In February 2014, the FCC announced our winning bids in the Tribal Mobility Fund I auction for a $41.4 million grant to partially fund expansion ofour 3G wireless network, or better, to locations in Alaska where we would not otherwise be able to construct within our return-on-investmentrequirements. We filed a long-form application with the FCC by their deadline and this form was approved in October 2014. We expect to receiveone-third of the grant funds in the first half of 2015 and between $6.0 and $16.0 million in additional grant fund disbursements in 2015, dependingon upgrades completed and test results submitted to and approved by the FCC.We have entered into several financing arrangements under the NMTC program which have provided a total of $32.3 million in net cash to helpfund the extension of terrestrial broadband service for the first time to rural Northwestern Alaska communities via a high capacity hybrid fiber opticand microwave network. The project, called TERRA-NW, connects to our TERRA-Southwest network and provides a high capacity backboneconnection from the served communities to the Internet. We began construction on TERRA-NW in 2012 and all phases of construction werecomplete as of December 31, 2014. We have used the entire $32.3 million of NMTC Restricted Cash to fund TERRA-NW capital expenditures.While our short-term and long-term financing abilities are believed to be adequate as a supplement to internally generated cash flows to fundcapital expenditures and acquisitions as opportunities arise, turmoil in the global financial markets may negatively impact our ability to furtheraccess the capital markets in a timely manner and on attractive terms, which may have a negative impact on our ability to grow our business.39Table of ContentsWe monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on safety of principal andsecondarily on maximizing yield on those funds.Our net cash flows provided by and (used for) operating, investing and financing activities, as reflected in the Consolidated Statements of CashFlows for 2014 and 2013, are summarized as follows (amounts in thousands): 2014 2013Operating activities$258,203 159,634Investing activities(202,140) (266,351)Financing activities(85,632) 127,197Net increase (decrease) in cash and cash equivalents$(29,569) 20,480Operating ActivitiesThe increase in cash flows provided by operating activities from 2013 to 2014 is due to an increase in net income and a decrease in accountsreceivable due to the timing of receipt of payments.Investing ActivitiesNet cash used in investing activities consists primarily of cash paid for capital expenditures and in 2013 $100.0 million to purchase wirelessnetwork assets from ACS as part of the close of the 2013 AWN transaction. Our most significant recurring investing activity has been capitalexpenditures and we expect that this will continue in the future. A significant portion of our capital expenditures is based on the level of customergrowth and the technology being deployed.Our cash expenditures for property and equipment, including construction in progress, totaled $176.1 million and $180.6 million during 2014 and2013, respectively. Our cash capital expenditures decreased in 2014 primarily due to the timing of payments to vendors. Depending on availableopportunities and the amount of cash flow we generate during 2015, we expect our 2015 core capital expenditures to total approximately $170.0million.Financing ActivitiesNet cash used by financing activities in 2014 consists primarily of payments to ACS for preferential cash distributions, repayment of Rural UtilitiesService debt, and repurchases of our common stock. Our borrowings fluctuate from year to year based on our liquidity needs. We may useexcess cash to make optional repayments on our debt or repurchase our common stock depending on various factors, such as market conditions.Available Borrowings Under Senior Credit FacilityOur Senior Credit Facility includes a $240.0 million term loan and a $150.0 million revolving credit facility with a $25.0 million sublimit for letters ofcredit. We had $240.0 million outstanding under the term loan at December 31, 2014. Under the revolving portion of the Senior Credit Facility wehave borrowed $39.0 million and have $22.5 million of letters of credit outstanding, which leaves $88.5 million available for borrowing as ofDecember 31, 2014. A total of $279.0 million is outstanding as of December 31, 2014.Debt CovenantsWe are subject to covenants and restrictions applicable to our $325.0 million in aggregate principal amount of 6.75% Senior Notes due 2021 (“2021Notes”), our $425.0 million in aggregate principal amount of 8.63% Senior Notes due 2019 ("2019 Notes"), Senior Credit Facility, and Wells Fargonote payable. We are in compliance with the covenants, and we believe that neither the covenants nor the restrictions in our indentures or loandocuments will limit our ability to operate our business.Share RepurchasesGCI’s Board of Directors has authorized a common stock buyback program for the repurchase of GCI Class A and Class B common stock in orderto reduce the outstanding shares of Class A and Class B common stock. Under this program, we are currently authorized to make up to $122.2million of repurchases as of December 31, 2014. We are authorized to increase our repurchase limit $5.0 million per quarter indefinitely and to usestock option exercise proceeds to repurchase additional shares. If stock repurchases are less than the total approved quarterly amount thedifference may be carried forward and applied against future stock repurchases. During 2014 we repurchased 0.4 million shares of GCI commonstock under the stock buyback program at a cost of $4.2 million. The common40Table of Contentsstock buyback program is expected to continue for an indefinite period dependent on leverage, liquidity, company performance, and marketconditions and subject to continued oversight by GCI’s Board of Directors. The open market repurchases have and will continue to comply with therestrictions of Securities Exchange Act of 1934 Rule 10b-18.Schedule of Certain Known Contractual ObligationsThe following table details future projected payments associated with certain known contractual obligations as of December 31, 2014 (amounts inthousands): Payments Due by Period Total Less than 1 Year 1 to 3 Years 4 to 5 Years More Than 5YearsLong-term debt$1,388,796 2,679 6,634 710,590 668,893Interest on long-term debt479,291 73,247 166,225 158,633 81,186Capital lease obligations, including interest100,429 13,444 26,887 26,890 33,208Operating lease commitments207,126 38,830 61,664 42,823 63,809Purchase obligations51,626 51,626 — — —Total contractual obligations$2,227,268 179,826 261,410 938,936 847,096Long-term debt listed in the table above includes principal payments on our 2019 and 2021 Notes, Senior Credit Facility including the Term B Loanthat was signed on February 2, 2015, the Searchlight Note that was signed on February 2, 2015, and the Wells Fargo note payable. Interest on theamount outstanding under our Senior Credit Facility is based on variable rates. We used the current rate paid on our Senior Credit Facility toestimate our future interest payments except that we used 4.75% to estimate our future interest payments on the Term B Loan. Our 2019 Notesrequire semi-annual interest payments of $18.3 million through November 2019 and our 2021 Notes require semi-annual interest payments of $11.0million through June 2021. For a discussion of our 2019 and 2021 Notes, and Senior Credit Facility see note 6 in the accompanying “Notes toConsolidated Financial Statements.”Capital lease obligations include our obligation to lease transponder capacity on Galaxy 18. For a discussion of our capital and operating leases,see note 13 in the accompanying “Notes to Consolidated Financial Statements.” We amended our transponder capacity lease agreement withIntelsat in October 2013 to lease additional transponder capacity on Intelsat's Galaxy 18 spacecraft and, as a result, on January 1, 2014 weincreased our existing capital lease asset and liability by $9.4 million.Purchase obligations include cancelable open purchase orders for goods and services for capital projects and normal operations totaling $51.6million which are not included in our Consolidated Balance Sheets at December 31, 2014, because the goods had not been received or theservices had not been performed at December 31, 2014.Off-Balance Sheet ArrangementsWe have not created, and are not party to, any special-purpose and off-balance sheet entities for the purpose of raising capital, incurring debt oroperating parts of our business that are not consolidated into our financial statements. We do not have any arrangements or relationships withentities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity or the availability of ourcapital resources.Recently Issued Accounting PronouncementsIn May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts withCustomers, or ASU 2014-09. This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting fromcontracts with customers and will supersede virtually all of the current revenue recognition guidance under GAAP. The standard is effective for thefirst interim period within annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The standard permits theuse of either the retrospective or cumulative effect transition method. We are currently evaluating the impact of the provisions of this new standardon our financial position and results of operations.41Table of ContentsCritical Accounting Policies and EstimatesOur accounting and reporting policies comply with GAAP. The preparation of financial statements in conformity with GAAP requires managementto make estimates and assumptions. Our financial position and results of operations can be affected by these estimates and assumptions, whichare integral to understanding reported results. Critical accounting policies are those policies that management believes are the most important tothe portrayal of our financial condition and results, and require management to make estimates that are difficult, subjective or complex. Mostaccounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether ornot a policy is critical in the preparation of financial statements. These factors include, among other things, whether the estimates are significantto the financial statements, the nature of the estimates, the ability to readily validate the estimates with other information including third parties oravailable prices, and sensitivity of the estimates to changes in economic conditions and whether alternative accounting methods may be utilizedunder GAAP. For all of these policies, management cautions that future events rarely develop exactly as forecast, and the best estimatesroutinely require adjustment. Management has discussed the development and the selection of critical accounting policies with our AuditCommittee.Those policies and estimates considered to be critical for the year ended December 31, 2014 are described below.Revenue RecognitionThe accounting estimates related to revenues from the Remote high cost, rural health, and schools and libraries USF programs are dependenton various inputs including our estimate of the statewide support cap, our assessment of the impact of new FCC regulations, the potentialoutcome of FCC proceedings and the potential outcome of USAC contract reviews. Some of the inputs are subjective and based on ourjudgment regarding the outcome of certain variables and are subject to upward or downward adjustment in subsequent periods. Significantchanges to our estimates could result in material changes to the revenues we have recorded and could have a material effect on our financialcondition and results of operations.Allowance for Doubtful ReceivablesWe maintain allowances for doubtful receivables for estimated losses resulting from the inability of our customers to make requiredpayments. We also maintain an allowance for doubtful receivables based on notification that a customer may not have satisfactorily compliedwith rules necessary to obtain supplemental funding from USAC for services provided by us under our packaged communications offerings torural hospitals, health clinics and school districts. We base our estimates on the aging of our accounts receivable balances, financial health ofspecific customers, regional economic data, changes in our collections process, regulatory requirements, and our customers’ compliance withUSAC rules. If the financial condition of our customers were to deteriorate or if they are unable to emerge from reorganization proceedings,resulting in an impairment of their ability to make payments, additional allowances may be required. If their financial condition improves, orthey emerge successfully from reorganization proceedings, allowances may be reduced. Such allowance changes could have a materialeffect on our financial condition and results of operations.Impairment and Useful Lives of Intangible AssetsWe had $510.6 million of indefinite-lived intangible assets at December 31, 2014, consisting of goodwill of $229.6 million, cable certificates of$191.6 million, wireless licenses of $86.3 million, and broadcast licenses of $3.1 million. Our indefinite-lived intangible assets are testedannually for impairment during the fourth quarter and at any time upon the occurrence of certain events or substantive changes incircumstances that indicate the assets might be impaired.We are allowed to first assess qualitative factors (“Step Zero”) to determine whether it is more likely than not that goodwill is impaired,however, we chose to assess goodwill for impairment using the traditional quantitative two-step process. The first step of the quantitativegoodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount. Todetermine our reporting units, we evaluate the components one level below the segment level and we aggregate the components if they havesimilar economic characteristics. As a result of this assessment, our reporting units are the same as our two reportable segments. If thecarrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test compares the implied fair value ofthe reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds theimplied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill isdetermined in the same manner as the amount of goodwill that would be recognized in a business combination.42Table of ContentsWe are allowed to perform a Step Zero analysis for our annual test over our indefinite-lived intangible assets other than goodwill. However, wechose to test for impairment using the traditional quantitative approach. The impairment test for identifiable indefinite-lived intangible assetsother than goodwill consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value ofthe intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.Goodwill represents the excess of cost over fair value of net assets acquired in connection with a business acquisition. We use an incomeapproach to determine the fair value of our reporting units for purposes of our goodwill impairment test. In addition, a market-based approachis used where possible to corroborate the fair values determined by the income approach.Our cable certificates represent agreements with government entities to construct and operate a video business. The value of our cablecertificates is derived from the economic benefits we receive from the right to solicit new customers and to market new services. The amountwe have recorded for cable certificates is from cable system acquisitions. The cable certificates are valued under a direct discounted cashflow method whereby the cash flow associated with existing customers is isolated after appropriate contributory asset charges and thenprojected based on an analysis of customer churn and attrition characteristics.Our wireless licenses are from the FCC and give us the right to provide wireless service within a certain geographical area. The amount wehave recorded is from acquisitions of wireless companies and auctions of wireless spectrum. We use comparable market transactions fromrecent FCC auctions, as appropriate, and a hypothetical build-up method to value our wireless licenses.Our broadcast licenses are from the FCC and give us the right to broadcast television stations within a certain geographical area. We used ahypothetical build-up method to value our broadcast licenses.The direct discounted cash flow, hypothetical build-up, and income approach valuation methods require us to make estimates andassumptions including projected cash flows, discount rate, customer churn, and customer behaviors and attrition. These estimates andassumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such impairmentcharge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in natureand involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptionscould significantly affect the estimates. Events and factors that may be out of our control that could affect the estimates include such thingsas competitive forces, customer behaviors, change in revenue growth trends, cost structures and technology, and changes in discount rates,performance compared to peers, material and ongoing negative economic trends, and specific industry or market sector conditions. We mayalso record impairments in the future if there are changes in long term market conditions, expected future operating results, or laws andregulations that may prevent us from recovering the carrying value of our indefinite-lived intangible assets .We have allocated all of the goodwill to our reporting units and based on our annual impairment test as of October 31, 2014, the fair value ofeach reporting unit exceeded the book value by a range between 25% and 26%, which we believe is a large margin. We believe none of ourreporting units were close to failing step one of the goodwill impairment test.Based on our annual impairment test as of October 31, 2014, the fair value of our cable certificates exceeded the book value by 94% and$179.4 million, which we believe is a large margin. The fair value of our wireless licenses exceeded the book value by 11% and $9.7 millionas of October 31, 2014, which we believe is a large margin.Valuation Allowance for Net Operating Loss Deferred Tax AssetsOur income tax policy provides for deferred income taxes to show the effect of temporary differences between the recognition of revenue andexpenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities and their reported amounts in thefinancial statements. We have recorded deferred tax assets of $132.0 million associated with income tax net operating losses that weregenerated from 2000 to 2014, and that primarily expire from 2020 to 2034, and with charitable contributions that were converted to netoperating losses in 2004 to 2007, 2013, and 2014 and that expire in 2024 to 2027, 2033, and 2034,43Table of Contentsrespectively. We have recorded deferred tax assets of $1.7 million associated with alternative minimum tax credits that do notexpire. Significant management judgment is required in developing our provision for income taxes, including the determination of deferred taxassets and liabilities and any valuation allowances that may be required against the deferred tax assets. We have not recorded a valuationallowance on the deferred tax assets as of December 31, 2014, based on management’s belief that future reversals of existing temporarydifferences and estimated future taxable income exclusive of reversing temporary differences and carryforwards will, more likely than not, besufficient to realize the benefit of these assets over time. In the event that actual results differ from these estimates or if our historical trendschange, we may be required to record a valuation allowance on deferred tax assets, which could have a material adverse effect on ourconsolidated financial position or results of operations.Other significant accounting policies, not involving the same level of measurement uncertainties as those discussed above, are neverthelessimportant to an understanding of the financial statements. A complete discussion of our significant accounting policies can be found in note 1 inthe accompanying “Notes to Consolidated Financial Statements.”Regulatory DevelopmentsSee “Part I — Item 1 — Business — Regulation” for more information about regulatory developments affecting us.InflationWe do not believe that inflation has a significant effect on our operations. Item 7A. Quantitative and Qualitative Disclosures about Market RiskWe are exposed to various types of market risk in the normal course of business, including the impact of interest rate changes. Our Senior CreditFacility carries interest rate risk. Amounts borrowed under our Senior Credit Facility bear interest at LIBOR plus 2.75% or less depending upon ourTotal Leverage Ratio (as defined in the Senior Credit Facility). Should the LIBOR rate change, our interest expense will increase or decreaseaccordingly. As of December 31, 2014, we have borrowed $288.8 million subject to interest rate risk. On this amount, each 1% increase in theLIBOR interest rate would result in $2.9 million of additional gross interest cost on an annualized basis. All of our other material borrowings have afixed interest rate. We do not hold derivatives.Item 8. Consolidated Financial Statements and Supplementary DataOur consolidated financial statements are filed under this Item, beginning on page 78. Our supplementary data is filed under Item 7, beginning onpage 30.Item 9. Changes In and Disagreements With Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports that we fileor submit under the Securities Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized, accumulated and communicated toour management, including our principal executive and financial officers, to allow timely decisions regarding required financial disclosure, andreported as specified in the SEC’s rules and forms. As of the end of the period covered by this Annual Report on Form 10-K, we carried out anevaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Exchange Act Rule 13a -15(e)) under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief FinancialOfficer. Based on that evaluation and as described below under “Management’s Report on Internal Control Over Financial Reporting," ourmanagement, including our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures were noteffective as of December 31, 2014, as a result of the material weakness described below.The certifications attached as Exhibits 31 and 32 to this report should be read in conjunction with the disclosures set forth herein.44Table of ContentsManagement’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined inExchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and ourChief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) in 2013.Based on our evaluation of the effectiveness of our internal control over financial reporting, our management concluded that as of December 31,2014, we did not maintain effective internal control over financial reporting due to a material weakness associated with inadequately designedinternal controls in our financial reporting process related to the calculation of our income tax expense during all quarters in 2014. See note 14,Selected Quarterly Financial Data (Unaudited), included in Part IV of this annual report on Form 10-K for further discussion of this immaterial errorcorrection. Grant Thornton LLP, our independent registered public accounting firm, has issued an audit report on our internal control over financial reporting asof December 31, 2014, which is included in Item 8 of this Form 10-K.Management's Plan for Remediation of Material WeaknessIn the first quarter of 2015 we will remediate our inadequately designed internal controls in our financial reporting process related to the calculationof our income tax expense. We will strengthen the design and operation of our controls over the initial calculation and the review and approval ofthe calculation. We will reinforce to staff responsible that a heightened sense of awareness is needed during the initial preparation, aswell as to any subsequent changes, and during analysis of the result. Changes to the process will be documented to ensureconsistent application.Changes in Internal Control Over Financial ReportingOn July 22, 2013, we closed the transactions under the Wireless Agreement entered into on June 4, 2012, pursuant to which the parties agreed tocontribute the respective wireless network assets of GCI, ACS and their affiliates to AWN. In 2014 we implemented AWN's internal control overfinancial reporting associated with the provision of wholesale services to ACS.Except as described above there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of theExchange Act) identified in connection with the evaluation of our controls performed during the quarter ended December 31, 2014, that havematerially affected, or are reasonably likely to materially affect, our internal control over financial reporting.A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with GAAP. A company's internal control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on thefinancial statements.Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligenceand compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting alsocan be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements willnot be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known featuresof the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.We may enhance, modify, and supplement internal controls and disclosure controls and procedures based on experience.45Table of ContentsItem 9B. Other InformationNone.46Table of ContentsPart IIIItem 10. Directors, Executive Officers and Corporate GovernanceIdentificationAs of December 31, 2014, our board consisted of nine director positions, divided into three classes of directors serving staggered three-yearterms.A director on our board is elected at an annual meeting of shareholders and serves until the earlier of his or her resignation or removal, or his or hersuccessor is elected and qualified. Our executive officers generally are appointed at our board's meeting immediately preceding each annualmeeting of shareholders and serve at the discretion of the board.The following table sets forth certain information about our directors and executive officers as of December 31, 2014:NameAgePositionStephen M. Brett174Chairman, DirectorRonald A. Duncan162President, Chief Executive Officer and DirectorPeter J. Pounds41Senior Vice President, Chief Financial Officer, and SecretaryG. Wilson Hughes69Chief Executive Officer, The Alaska Wireless NetworkWilliam C. Behnke57Senior Vice PresidentMartin E. Cary50Vice President – General Manager, Managed Broadband ServicesGregory F. Chapados57Executive Vice President and Chief Operating OfficerPaul E. Landes56Senior Vice President and General Manager, Consumer ServicesGregory W. Pearce51Vice President and General Manager, Business ServicesTina M. Pidgeon46Senior Vice President, Chief Compliance Officer, General Counsel and Government AffairsBridget L. Baker154DirectorJerry A. Edgerton172DirectorScott M. Fisher148DirectorWilliam P. Glasgow156DirectorMark W. Kroloff157DirectorStephen R. Mooney155DirectorJames M. Schneider162Director1The present classification of our board is as follows: (1) Class I – Messrs. Edgerton and Kroloff and Ms. Baker, whose present terms expire at the time of our2017 annual meeting; (2) Class II – Messrs. Brett, Duncan and Mooney whose present terms expire at the time of our 2015 annual meeting; and (3) Class III– Messrs. Fisher, Glasgow, and Schneider, whose present terms expire at the time of our 2016 annual meeting.The board, when considering whether directors have the experience, qualifications, attributes or skills, taken as a whole, to enable the board tosatisfy its oversight responsibilities effectively in light of the Company's business and structure, focused primarily on each person's backgroundand experience. We believe that the Company's directors have backgrounds that, when combined, provide us with a board equipped to direct usthrough an ever challenging course in the segments of the telecommunication business in which we are involved. Attributes of members of ourboard include experience in entrepreneurial, cable service, telecommunication, technological and financial aspects of companies similar to, as wellas much larger than, us.In particular, our board considered important the following regarding its members. With regard to Mr. Brett, our board considered histelecommunications and cable experience, as well as his over 40 year experience as a corporate lawyer. With regard to Ms. Baker, our boardconsidered her experience with broadcast and cable networks. With regards to Messrs. Fisher and Glasgow, our board considered the broadbackgrounds of these individuals in finance and their operational experience with cable companies. With regards to Messrs. Edgerton47Table of Contentsand Mooney, our board considered the extensive experience and expertise of these individuals in business development in thetelecommunications industry. Our board also considered the broad perspective brought by Mr. Kroloff's experience in operating diversebusinesses throughout Alaska as well as his experience as a lawyer. With regard to Mr. Schneider, our board considered his significant financialand accounting experience including his time spent as Chief Financial Officer of a large public company.Our board also considered the many years of experience with the Company represented by Mr. Duncan, our President and Chief ExecutiveOfficer. He has been with the Company since he co-founded it.Many of our directors, including Messrs. Edgerton, Glasgow, Kroloff, Mooney and Schneider, were initially proposed for nomination by (or, in thecase of Mr. Kroloff, through a request from Mr. Duncan to) holders of significant amounts of Company shares. Our board has retained each ofthese directors, even after the shareholders have exited the Company or no longer have retained a right to nominate a director, due to the valuedexpertise our board feels they provide as members.Stephen M. Brett. Mr. Brett has served as Chairman of our board since June 2005 and as a director on our board since January 2001. He hasbeen of counsel to Sherman & Howard, L.L.C., a law firm, since January 2001. He was Senior Executive Vice President for AT&T Broadbandfrom March 1999 to April 2000. His present term as a director on our board expires at the time of our 2015 annual meeting.Ronald A. Duncan. Mr. Duncan is a co-founder of the Company and has served as a director on our board since 1979. Mr. Duncan has servedas our President and Chief Executive Officer since January 1989. His present term as director on the board expires at the time of our 2015 annualmeeting.Peter J. Pounds. Mr. Pounds became our Chief Financial Officer and one of our Senior Vice Presidents effective January 1, 2014. Prior to that heserved as Vice President, Finance since 2009. Prior to that, he served as Senior Financial Analyst.G. Wilson Hughes. Mr. Hughes has served as the Chief Executive Officer of The Alaska Wireless Network, LLC since July 22, 2013. Prior tothat he served as our Executive Vice President – Wireless from June 4, 2012 to July 22, 2013. Prior to that, he served as our Executive VicePresident and General Manager from June 1991 to June 4, 2012.William C. Behnke. Mr. Behnke has served as one of our Senior Vice Presidents since January 2001.Martin E. Cary. Mr. Cary has served as our Vice President – General Manager, Managed Broadband Services since September 2004.Gregory F. Chapados. Mr. Chapados has served as our Executive Vice President and Chief Operating Officer since June 2012. Prior to that, heserved as one of our Senior Vice Presidents from June 2006 to June 2012.Paul E. Landes. Mr. Landes has served as one of our Senior Vice Presidents and as General Manager, Consumer Services since December2010. Prior to that, he served as our Vice President and General Manager, Consumer Services from September 2005 to December 2010.Gregory W. Pearce. Mr. Pearce has served as our Vice President and General Manager, Business Services since June 2010. Prior to that, heserved as our Vice President and General Manager, Commercial Services beginning in September 2005.Tina M. Pidgeon. Ms. Pidgeon has served as our Senior Vice President, Chief Compliance Officer, General Counsel and Government Affairs,since September 2010. Prior to that, she served as our Vice President, Federal Regulatory Affairs from January 2003 to September 2010.Bridget L. Baker. Ms. Baker has served as a director on our board since July 2013. Since January 2013, she has been a Principal of BakerMedia, Inc., an entertainment and media consulting firm that she founded. From 2006 to 2012, she was NBCUniversal's President of TV NetworksDistribution where she oversaw the North American distribution of NBCUniversal's content across the cable, satellite, and telecommunicationsindustry. Her present term as a director on our board expires at the time of our 2017 annual meeting.48Table of ContentsJerry A. Edgerton. Mr. Edgerton has served as a director on our board since June 2004. Since January 2013, he has been Chief ExecutiveOfficer of Cumulus Solutions, Inc., a provider of visual collaboration tools. From September 2011 to December 2012, he was President of GlobalServices for iNETWORKS Group, Inc., a comprehensive telecommunications solutions provider. From July 2009 to August 2011, he wasPresident of Government Markets for Core 180, a network integrator for large governmental and commercial customers. From November 2007 toMay 2009, he was Chief Executive Officer for Command Information, Inc., a next generation Internet service company. From April 2007 toOctober 2007, Mr. Edgerton was an advisor on matters affecting the telecommunications industry as well as the U.S. government. Prior to thatand from January 2006 to April 2007, he was Group President of Verizon Federal. Prior to that and from November 1996, he was Senior VicePresident – Government Markets for MCI Communications Corporation, an affiliate of MCI, which was later acquired by Verizon Communications,Inc. His present term as a director on our board expires at the time of our 2017 annual meeting.Scott M. Fisher. Mr. Fisher has served on our board since December 2005. From 1998 to the present, he has been a partner of Fisher CapitalPartners, Ltd., a private equity and real estate investment company located in Denver, Colorado. During that time, Fisher Capital owned andoperated Peak Cablevision, a multiple system cable television operator with approximately 120,000 subscribers. At Peak Cablevision, Mr. Fisherwas responsible for television programming and corporate development. From June 1990 to April 1998, he was Vice President at The Bank ofNew York and BNY Capital Resources Corporation, an affiliate of The Bank of New York, where he worked in the corporate lending and commercialleasing departments. Mr. Fisher serves on the advisory boards of several private companies. His present term as director on our board expires atthe time of our 2016 annual meeting.William P. Glasgow. Mr. Glasgow has served as a director on our board since 1996. From 2005 to the present, Mr. Glasgow has been ChiefExecutive Officer of AmericanWay Education. From 1999 to December 2004, he was President/CEO of Security Broadband Corp. From 2000 tothe present Mr. Glasgow has been President of Diamond Ventures, L.L.C., a Texas limited liability company and sole general partner of Prime IIManagement, L.P., and Prime II Investments, L.P., both of which are Delaware limited partnerships. Since 1996, he has been President of PrimeII Management, Inc., a Delaware corporation, which was formerly the sole general partner of Prime II Management, L.P. His present term as adirector on our board expires at the time of our 2016 annual meeting.Mark W. Kroloff. Mr. Kroloff has served as a director on our board since February 2009. Since January 2010, he has been a principal at FirstAlaskan Capital Partners, LLC, an investment firm. From May 2005 to December 2009, he was Senior Executive Vice President and ChiefOperating Officer of Arctic Slope Regional Corporation ("ASRC"), an Alaska Native regional corporation formed pursuant to the Alaska NativeClaims Settlement Act. From 2001 to April 2005, Mr. Kroloff was Chief Operating Officer of Cook Inlet Region, Inc., also an Alaska Nativeregional corporation. Prior to that, from 1989 to 2001 he was Vice President and General Counsel of Cook Inlet Region, Inc. He also serves onthe board of managers for Trilogy International Partners, LLC. Mr. Kroloff's present term as a director on our board expires at the time of our 2017annual meeting.Stephen R. Mooney. Mr. Mooney has served as a director on our board since January 1999. He has been a Partner at Chessiecap Securities,Inc., an investment bank specializing in technology and telecommunications services based in Maryland since 2012. From April 2010 to 2012, Mr.Mooney was a Managing Director with the McClean Group, LLC, a national financial advisory services firm. From February 2008 to November2009, Mr. Mooney was Vice President, Business Development for Affiliated Computer Services, Inc., a global information technology andbusiness process outsourcing company. From January 2006 to September 2007, he was Executive Director, Business Development ofVerizonBusiness, a unit of Verizon. Prior to that, he was Vice President, Corporate Development and Treasury Services at MCI beginning in2002. From 1999 to 2002, he was Vice President of WorldCom Ventures Fund, Inc. His present term as a director on our board expires at thetime of our 2015 annual meeting.James M. Schneider. Mr. Schneider has served as a director on our board since July 1994. He has been Chairman of Frontier Bancshares, Inc.since February 2007. Prior to that, Mr. Schneider had been Senior Vice President and Chief Financial Officer for Dell, Inc. from March 2000 toFebruary 2007. Prior to that, he was Senior Vice President – Finance for Dell Computer Corporation from September 1998 to March 2000. From2012 to the present Mr. Schneider has been an Operating Partner for Lead Edge Capital. He served on the board of directors of GAP, Inc. fromSeptember 2003 to October 2010. Mr. Schneider also served on the board of directors of Lockheed Martin Corporation from December 2005 toAugust 2010. His present term as a director on our board expires at the time of our 2016 annual meeting.49Table of ContentsSection 16(a) Beneficial Ownership Reporting ComplianceDuring 2014, one of our Directors (Mr. Edgerton) inadvertently failed to file a Form 4 with the SEC that was due on May 30, 2014, however, thefiling was made on June 25, 2014.Code of Business Conduct and EthicsOur current Code of Business Conduct and Ethics ("Ethics Code"), was adopted by our board in 2013. It applies to all of our officers, directors andemployees. The Ethics Code takes as its basis a set of business principles adopted by our board several years ago. It also builds upon the basicrequirements for a code of ethics as required by federal securities law and rules adopted by the SEC.Through our Ethics Code, we reaffirm our course of business conduct and ethics as based upon key values and characteristics and throughadherence to a clear code of ethical conduct. Our Ethics Code promotes honest and ethical conduct, including ethical handling of actual orapparent conflicts of interest between personal and professional relationships of our employees. It also promotes full, fair, accurate, timely andunderstandable disclosure in our reports and documents filed with, or submitted to, the SEC and other public communications made by us. OurEthics Code further promotes compliance with applicable governmental laws, rules and regulations, internal reporting of violations of the code toappropriate persons as identified in the code and accountability for adherence to the code.A copy of our Ethics Code is displayed on our Internet website at www.gci.com. Except for the Ethics Code, and any other documentsspecifically incorporated herein, no information contained on the Company’s website shall be incorporated by reference in this Form 10-K.No Change in Nominating ProcedureThere were no changes made during 2014 to the procedure by which our shareholders may recommend nominees to our board.Litigation and Regulatory MattersWe were, as of December 31, 2014, involved in several administrative and civil action matters primarily related to our telecommunications marketsin Alaska and the remaining 49 states and other regulatory matters. These actions are discussed in more detail elsewhere in this report. See"Part I – Item 3 – Legal Proceedings." However, as of that date, our board was unaware of any legal proceedings in which one or more of ourdirectors, officers, affiliates or owners of record or beneficially of more than 5% of any class of our voting securities, or any associates of thepreviously listed persons were parties adverse to us or any of our subsidiaries. Furthermore, as of that date, our board was unaware of any eventsoccurring during the past 10 years materially adverse to an evaluation of the ability or integrity of any director, person nominated to become adirector or executive officer of the Company.In December 2010, Mr. Schneider settled charges brought against him by the SEC for actions that allegedly took place when he was the chieffinancial officer at Dell, Inc. Mr. Schneider is no longer employed by Dell, Inc. He settled the charges and consented to the issuance of an SECadministrative order without admitting or denying the SEC's findings, with limited exceptions. The limited exceptions are acknowledgment of theSEC's jurisdiction over Mr. Schneider and the subject matter of the SEC proceedings brought against him, and the SEC findings with respect tolitigation involving that company and certain of its senior executive officers including Mr. Schneider. The court in that litigation entered an orderpermanently enjoining Mr. Schneider, by consent, from future violations of specified provisions of federal securities law. Mr. Schneider paid, asspecified in the court's order, $3 million as a civil money penalty and $83,096 in disgorgement of ill-gotten gains, as well as $38,640 in prejudgmentinterest. In the settlement with the SEC, Mr. Schneider has further consented to his suspension from appearing or practicing before the SEC asan accountant for at least five years, after which time he may request reinstatement by application to the SEC. 50Table of ContentsAudit Committee, Audit Committee Financial ExpertWe have a board audit committee ("Audit Committee") comprised of several members of our board, i.e., Messrs. Mooney (Chair), Fisher, andGlasgow.Our Audit Committee is governed by, and carries out its responsibilities under, an Audit Committee Charter, as adopted and amended from time totime by our board ("Audit Committee Charter"). The charter sets forth the purpose of the Audit Committee and its membership prerequisites andoperating principles. It also requires our Audit Committee to select our independent, registered, public accounting firm to provide for us accountingand audit services ("External Accountant") and sets forth other primary responsibilities. A copy of our Audit Committee Charter is available to ourshareholders on our Internet website: www.gci.com.The Nasdaq corporate governance listing standards require that at least one member of our Audit Committee must have past employmentexperience in finance or accounting, requisite professional certification in accounting, or comparable experience or background which results in theindividual's "financial sophistication." This financial sophistication may derive from the person being or having been a chief executive officer, chieffinancial officer or other senior officer with financial oversight responsibilities.Our board believes that Messrs. Fisher, Glasgow and Mooney, are audit committee financial experts ("Audit Committee Financial Experts") andalso meet the Nasdaq requirements for financial sophistication. Our board further believes that Messrs. Fisher, Glasgow and Mooney are each anindependent director as the term is defined in the Nasdaq Stock Market corporate listing standards (to which the Company is subject), i.e., anindividual other than one of our executive officers or employees or any other individual having a relationship which in the opinion of our board wouldinterfere in carrying out the responsibilities of a director ("Independent Director") and are independent as defined by Rule 10A-3(b)(1) under theExchange Act.Under the SEC's rules, an Audit Committee Financial Expert is defined as a person who has all of the following attributes:•Understanding of GAAP and financial statements.•Ability to assess the general application of GAAP in connection with accounting for estimates, accruals and reserves.•Experience in preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity ofaccounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to beraised by our financial statements, or experience actively supervising one or more persons engaged in such activities.•Understanding of internal control over financial reporting.•Understanding of audit committee functions.The Audit Committee Charter specifies how one may determine whether a person has acquired the attributes of an Audit Committee FinancialExpert. They are one or more of the following:•Education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor orexperience in one or more positions that involved the performance of similar functions.•Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor orperson performing similar functions.•Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation,auditing or evaluation of financial statements.•Other relevant experience.51Table of ContentsOur Audit Committee acts on behalf of our board and generally carries out specific duties including the following, all of which are described in detailin our Audit Committee Charter:•Principal Accountant Selection, Qualification – Is directly responsible for appointment, compensation, retention, oversight,qualifications and independence of our External Accountant.•Financial Statements – Assists in our board's oversight of integrity of the Company financial statements.•Financial Reports, Internal Control – Is directly responsible for oversight of the audit by our External Accountant of ourfinancial reports and reports on internal control.•Annual Reports – Prepares reports required to be included in our annual proxy statement.•Complaints – Receives and responds to certain complaints relating to internal accounting controls, and auditing matters,confidential, anonymous submissions by our employees regarding questionable accounting or auditing matters, and certainalleged illegal acts or behavior-related conduct in violation of our Ethics Code. See "Part III – Item 10 – Code of BusinessConduct and Ethics."•Principal Accountant Disagreements – Resolves disagreements, if any, between our External Accountant and us regardingfinancial reporting.•Non-Audit Services – Reviews and pre-approves any non-audit services (audit-related, tax and other non-audit relatedservices) offered to us by our External Accountant ("Non-Audit Services").•Attorney Reports – Addresses certain attorney reports, if any, relating to violation of securities law or fiduciary duty by one ofour officers, directors, employees or agents.•Related Party Transactions – Reviews certain related party transactions as described elsewhere in this report. See "Part III –Item 13 – Certain Transactions."•Other – Carries out other assignments as designated by our board.Item 11. Executive CompensationCompensation Discussion and AnalysisOverview –Compensation of our executive officers and directors during 2014 was subject to processes and procedures carried out through our CompensationCommittee ("Compensation Program"). This compensation discussion and analysis ("Compensation Discussion and Analysis") addresses thematerial elements of our Compensation Program as applied to our Chief Executive Officer, our Chief Financial Officer, and to each of our threeother most highly compensated executive officers other than the Chief Executive Officer and Chief Financial Officer who were serving asexecutive officers as of December 31, 2014. All five of these officers are identified in the Summary Compensation Table ("Named ExecutiveOfficers"). See "Part III – Item 11 – Executive Compensation: Summary Compensation Table."Both the Compensation Committee and the Company believe that the compensation paid to the Named Executive Officers under ourCompensation Program is fair, reasonable, competitive and consistent with our Compensation Principles. See "Part III – Item 11 – CompensationDiscussion and Analysis: Principles of the Compensation Program."Our Compensation Committee is composed of Messrs. Brett, Edgerton (Chair), Mooney, and Schneider. All of the members of the committee areconsidered by our board to be Independent Directors.The charter of the Compensation Committee guides decisions regarding our Compensation Program, the aspects of which are described elsewherein this report. See "Part III – Item 11 – Compensation Discussion and52Table of ContentsAnalysis: Process." A copy of our Compensation Committee Charter is available to our shareholders on our Internet website: www.gci.com.Our Charter of the Compensation Committee sets forth the scope of authority of our Compensation Committee and requires the committee to carryout the following:•Review, on an annual basis, plans and targets for executive officer and board member compensation, if any –◦Review is specifically to address expected performance and compensation of, and the criteria on which compensation is basedfor, the Chief Executive Officer and such other of our executive officers as our board may designate for this purpose.•Monitor the effect of ongoing events on, and the effectiveness of, existing compensation policies, goals, and plans –◦Events specifically include but are not limited to the status of the premise that all pay systems correlate with our compensationgoals and policies.◦Report from time to time, its findings to our board.•Administer our Amended and Restated 1986 Stock Option Plan ("Stock Option Plan") and approve grants of options and awards pursuantto the plan.•Strive to make our compensation plans fair and structured so as to maximize shareholder value.In carrying out its duties, our Compensation Committee may accept for review and inclusion in its annual review with our board, recommendationsfrom our Chief Executive Officer as to expected performance and compensation of, and the criteria on which compensation is based for, executiveofficers. See "Part III – Item 11 – Compensation Discussion and Analysis: Process."Principles of the Compensation Program –Our Compensation Program is based upon the following principles ("Compensation Principles"):•Compensation is related to performance and must cause alignment of interests of executive officers with the long term interests of ourshareholders.•Compensation targets must take into consideration competitive market conditions and provide incentives for superior performance by theCompany.•Actual compensation must take into consideration the Company's and the executive officer's performance over the prior year and the longterm, and the Company's resources.•Compensation is based upon both qualitative and quantitative factors.•Compensation must enable the Company to attract and retain management necessary to cause the Company to succeed.Process –Overview. Our Compensation Committee reviews and approves the base salary, incentive and other compensation of our Chief Executive Officerand senior executive officers, including the Named Executive Officers. The analyses and recommendations of the Chief Executive Officer onthese matters may be considered by our Compensation Committee in its deliberations and approvals.Other elements of executive compensation and benefits as described in this section are also reviewed by our Compensation Committee on aregular basis.Implementation. Discussions on executive compensation and benefits made by the Compensation Committee have been guided by ourCompensation Principles. The elements of compensation as described later in this53Table of Contentssection are believed by the Compensation Committee to be integral and necessary parts of the Compensation Program.Our Compensation Committee has concluded that each individual segment of each element of executive compensation continues generally to beconsistent with one or more of our Compensation Principles. Our Compensation Committee has further concluded the amount of compensationprovided by the segment is reasonable, primarily based upon a comparison of the compensation amounts and segments we provide whencompared to those offered by other similar companies in our industry and in our market.Our process for determining executive compensation and benefits does not involve a precise and identifiable formula or link between each elementand our Compensation Principles. However, it takes into consideration market practice and information provided by ourmanagement. Furthermore, it is based upon the relationship of compensation as shall be paid and financial performance of the Company. It isalso the result of discussion among our Compensation Committee members and management. Ultimately it is based upon the judgment of ourCompensation Committee.Each year our Compensation Committee reviews elements of compensation for each of our senior executive officers including, for 2014, theNamed Executive Officers.In 2010, base salary and incentive stock targets were compared to survey data and amounts offered by a group of similar companies. TheCompany's relative financial performance was reviewed in order to determine what a reasonable amount of compensation might be in relation to itspeer group. The compensation peer group is principally made up of the following:•Companies in industries similar to our Company.•Companies with which our Company competes for executive talent.•Our Company's direct business competitors.•Companies that compete with our Company for investment dollars.The compensation peer group list used in determining the reasonableness of our Compensation Program consisted of 16 companies as follows:Alaska Communications Systems Group, Inc.Knology, Inc.C Beyond, Inc.Mediacom Communications Corp.Cincinnati Bell, Inc.Premiere Global Services, Inc.Consolidated Communications Holdings, Inc.RCN CorpCrown Media Holdings, Inc.SureWest CommunicationsEquinix, Inc.Time Warner Telecom, Inc.Grande CommunicationsWave BroadbandIowa Telecommunications Services, Inc.XO Holdings, Inc.Individual levels of base compensation were generally targeted to be set within a range of between the 50th and 75th percentile, based upon theexecutive's individual performance in the prior year relative to his or her peers, the executive's future potential, and the scope of the executive'sresponsibilities and experience. Input from the individual executives in terms of their expectation and requirements were considered as well.We believe this method of setting compensation enables the Company to attract and retain individuals who are necessary to lead and manage theCompany while enabling the Company to differentiate between executives and performance levels and responsibility. The comparison to othercompanies also allowed the Compensation Committee to determine the reasonableness of the balance between long-term incentive and annualbase compensation.54Table of ContentsThe Compensation Committee determined that, in general, base compensation levels for the Company's senior officers were reasonable and withinthe 50th and 75th percentile when compared to officers of companies in our peer group having comparable financial performance when it completedits review in 2010.Based on its review in 2010, the Compensation Committee established a four year compensation plan that ended in 2013. During 2014, theCompensation Committee analyzed such things as the economy and the business environment in which the Company operates to determine if anymodifications were needed to the four year compensation plan established during 2010. Based on its review, the Compensation Committeeconcluded that that the salaries and incentive compensation established in 2010 were still appropriate for the senior executive officers with a fewexceptions. See “Part III – Item 11 – Compensation Discussion and Analysis: Performance Rewarded.” The Compensation Committee believesthe framework established in 2010 continues to provide an effective framework upon which the Compensation Program is based. TheCompensation Committee has modified the Compensation Program at its discretion to continue its effectiveness for motivating the seniorexecutive officers and aligning their interests with the long term interests of our shareholders and believes it is appropriate through 2016.Elements of Compensation –Overview. For 2014, the elements of compensation in our Compensation Program were as follows:•Base Salary.•Incentive Compensation Bonus Plan ("Incentive Compensation Plan").•Stock Option Plan.•Perquisites.•Retirement and Welfare Benefits.As of December 31, 2014, there were no compensatory plans or arrangements providing for payments to any of the Named Executive Officers inconjunction with any termination of employment or other working relationship of such an officer with us (including without limitation, resignation,severance, retirement or constructive termination of employment of the officer). Furthermore, as of that date, there were no such plans orarrangements providing for payments to any of the Named Executive Officers in conjunction with a change of control of us or a change in such anofficer's responsibilities to us. However, in the event of a change in control, the options and restricted stock of our Named Executive Officerscould vest. See "Part III – Item 11 – Executive Compensation: Potential Payments upon Termination or Change-in-Control."The Company has no requirements with respect to security ownership by its officers or directors, and it has no policies regarding hedging theeconomic risk of ownership of Company equity. Executive officers are invited to provide their input with respect to their compensation to theCompensation Committee primarily through our Chief Executive Officer.A Named Executive Officer participating in the Compensation Program could, under terms of the corresponding Incentive Compensation Planagreement with us and pursuant to our Deferred Compensation Plan, elect to defer a significant portion of that compensation. In this instance, theNamed Executive Officer becomes our unsecured creditor. See "Part III – Item 11 – Nonqualified Deferred Compensation."Base Salary. Effective January 1, 2014, based upon the process previously described in this section, the base salaries reported in the SummaryCompensation Table (see "Part III – Item 11 – Executive Compensation: Summary Compensation Table") were approved by the CompensationCommittee.Mr. Duncan's base salary reflects cash compensation of $925,000 per year. Mr. Duncan's duties remained unchanged during 2014.Mr. Hughes' base salary reflects cash compensation of $362,500 per year and $125,000 credited to his Deferred Compensation Arrangementaccount with us. Mr. Hughes' duties remained unchanged during 2014.55Table of ContentsMr. Pounds's base salary reflects cash compensation of $350,000 per year. His duties remained unchanged during 2014.Ms. Pidgeon's base salary reflects cash compensation of $325,000. During 2014 the Company added Chief Compliance Officer to her existingroles.Mr. Chapados' base salary reflects cash compensation of $450,000. His duties remained unchanged during 2014.Incentive Compensation Plan. Overview – A portion of the Company's compensation to each Named Executive Officer relates to, and iscontingent upon, the officer's performance and our financial performance and resources.Messrs. Duncan, Hughes, Pounds, Chapados and Ms. Pidgeon – Overview. In October 2010, our board approved changes to our IncentiveCompensation Plan to create the incentive compensation framework for our Named Executive Officers (Messrs. Duncan, Hughes, Pounds,Chapados and Ms. Pidgeon, collectively "Named Executive Officers").In the context of the Named Executive Officers, the Compensation Committee first determined the targeted annual incentive compensation foreach of them. Incentive compensation is paid out in the form of 50% cash and 50% restricted stock grants that vest 100% at the end of threeyears, unless otherwise determined by the Compensation Committee based on the individual circumstances of each of the Named ExecutiveOfficer. Therefore, the incentive compensation is designed to encourage the focus of these executives on long-term performance. Discretionaryannual cash bonuses are intended to reward short-term performance and to make our senior executive compensation packages competitive withcomparable executive positions in other companies.Incentive Compensation. The following table provides a summary of the 2014 incentive compensation targets for the Named Executive Officers:Name Adjusted EBITDA($) Capex Spending($) Discretionary($) Total 2014IncentiveCompensation PlanTarget($)Ronald A. Duncan1 398,578 192,860 1,414,308 2,005,746Peter J. Pounds2 67,500 30,000 202,500 300,000Gregory F. Chapados2 180,000 90,000 630,000 900,000G. Wilson Hughes 100,000 45,000 321,667 466,667Tina M. Pidgeon3 110,000 — 440,000 550,000 1 Mr. Duncan's incentive compensation target is calculated by multiplying the sum of his base salary, director cash compensation, estimatedvalue of the stock grant for service as a director, and incentive compensation ("Total Compensation") by the percentage increase in AdjustedEBITDA from Adjusted EBITDA in 2013 and adding that to his target incentive compensation. For 2014 that resulted in an additional $530,746added to his incentive compensation plan target of $1,475,000.2 The number of shares issued to Mr. Pounds and Mr. Chapados are determined by dividing the 50% of Incentive Compensation for shares bythe price of our Class A shares on December 31, 2012, which was $9.59. This arrangement is in place for Mr. Pounds and Mr. Chapados through2017.3 Ms. Pidgeon's Incentive Compensation is paid out in the form of 75% cash and 25% restricted stock grants that vest 100% at the end of threeyears.The following is a description of what each of these incentive compensation targets are and how they are measured.56Table of ContentsAdjusted EBITDA. The Adjusted EBITDA Goal is intended to focus Messrs. Duncan, Pounds, Chapados and Ms. Pidgeon on increasing theearnings before depreciation and amortization expense, net interest expense, income taxes, share-based compensation expense, accretionexpense, income or loss from equity investments, net income or loss attributable to non-controlling interest resulting from New Markets Tax Credittransactions and non-cash contribution adjustment (“Adjusted EBITDA”) of the Company and in the case of Mr. Hughes on increasing the AdjustedEBITDA of AWN. The goal is achieved by the Company recording Adjusted EBITDA that is greater than the targeted Adjusted EBITDA.The targets for this metric were $308.5 million in 2014 for Messrs. Duncan, Pounds, Chapados and Ms. Pidgeon and $137.0 million for Mr. Hugheswho would earn their Target Incentive Compensation for this goal if the metric was exceeded. In the case of Messrs. Duncan, Pounds, Chapados,Hughes and Ms. Pidgeon, the incentive compensation earned is increased or decreased from the Target Incentive Compensation by 5% for each$1 million that the actual Adjusted EBITDA is above or below the Adjusted EBITDA metric.Capex Spending. The Capex Spending target is based on core capex spending adjusted for certain one-time items such as real estatepurchases and grant funded projects ("Capex Spending") not exceeding the goal set forth by our board. For Messrs. Duncan, Pounds, andChapados the goal was $179.6 million in 2014. In 2014 the targeted incentive for Capex Spending will be paid out at 100% if the total CapexSpending for the year is $179.6 million or less. For 2014, the Capex Spending was less than $179.6 million. Ms. Pidgeon's incentivecompensation did not include this target.In the case of Mr. Hughes, the Capex Spending goal for AWN was $57.9 million. In 2014 the targeted incentive for Capex Spending will be paid outat 100% if the total Capex Spending for the year is $57.9 million or less. For 2014, the Capex Spending was less than $57.9 million.Discretionary. The board will take various factors into account when deciding on the payout of the discretionary portion of the plan applying tothe Named Executive Officers. These factors include, but are not limited to, leadership, crisis management, succession planning, strategicplanning, risk management, special projects, financial reporting, and compliance with our debt covenants.57Table of ContentsThe following table summarizes the 2014 incentive compensation achieved by the Named Executive Officers, each of whom participated in thisplan. The 2014 incentive compensation was paid 50% in cash and 50% issued in the form of restricted stock grants that will vest at the end ofthree years after the grant date with the exception of Ms. Pidgeon who was paid 75% in cash and 25% issued in the form of restricted stockgrants; the majority of the cash portion was paid in 2014 with the remainder paid in 2015:GoalsRonald A. Duncan Peter J. Pounds Gregory F.Chapados G. WilsonHughes Tina M. Pidgeon Adjusted EBITDA Goal – Target IncentiveCompensation$398,578 $67,500 $180,000 $100,000 $110,000 Adjusted EBITDA Goal Achievement1172.6%172.6%172.6%176.5%172.6%2014 Adjusted EBITDA Incentive CompensationEarned$687,946 $116,505 $310,680 $176,500 $189,860 Capex Spending$192,860 $30,000 $90,000 $45,000 N/A Capex Spending Achievement100%100%100%100%N/A 2014 Capex Spending Incentive CompensationEarned$192,860 $30,000 $90,000 $45,000 $— Discretionary$1,414,308 $202,500 $630,000 $321,667 $440,000 Discretionary Achievement291.5%102.3%94.9%104.3%110.9%2014 Discretionary Incentive CompensationEarned$1,293,626 $207,062 $597,664 $335,468 $488,178 2014 Incentive Compensation Earned$2,174,432$353,567 $998,344 $556,968 $678,038 1 The Adjusted EBITDA metric for 2014 was $308.5 million for the Company. Messrs. Duncan, Pounds, Chapados and Ms. Pidgeon wouldearn their Target Incentive Compensation for this goal if the Company had Adjusted EBITDA equal to the metric. The Target IncentiveCompensation is increased or decreased by 5% for each $1 million that the actual Adjusted EBITDA is above or below the metric. For2014, the actual Adjusted EBITDA was $323 million resulting in actual Adjusted EBITDA that was $14.0 above the metric, therefore, theearned Incentive Compensation for the Adjusted EBITDA goal was increased by 72.6%. The Adjusted EBITDA metric for 2014 was$143.0 million for AWN. Mr. Hughes would earn his Target Incentive Compensation for this goal if AWN had Adjusted EBITDA equal tothe metric. The Target Incentive Compensation is increased or decreased by 5% for each $1 million that the actual Adjusted EBITDA isabove or below the metric. For 2014, the actual Adjusted EBITDA for AWN was $158.3 million resulting in actual Adjusted EBITDA thatwas $15.3 million above the metric, therefore, the earned Incentive Compensation for the Adjusted EBITDA goal was increased by76.5%.2 Our Compensation Committee considered the following factors regarding the Discretionary Achievement of the Named ExecutiveOfficers. With regard to Mr. Duncan, the Compensation Committee took into account his leadership during 2014, performance indeveloping a strategic plan for key components of our business, diversification and succession planning. With regard to Mr. Pounds, theCompensation Committee considered his leadership in regards to risk management, financial planning and management, and financialreporting. With regard to Mr. Chapados, the Compensation Committee considered, among other thing, his leadership, his operating ofthe Wireline segment, his strategic and financial planning, and risk management. With regard to Mr. Hughes, the CompensationCommittee took into account his leadership of the AWN integration, succession planning and the operations of our wireless strategy.With regard to Ms. Pidgeon, the Compensation Committee considered her leadership in managing strategic legal initiatives for theCompany, team development, and her role in serving as General Counsel for the Company.58Table of ContentsIncentive Compensation Targets. Based on discussions with our CEO, management and the practices of other companies, our CompensationCommittee approved the following incentive compensation targets for our Named Executive Officers which is expected to be in place through2016:Name Adjusted EBITDAGoal($) Capex Spending1($) Discretionary($) Total 2015IncentiveCompensation PlanTarget($)Ronald A. Duncan2 295,000 36,875 1,143,125 1,475,000Peter J. Pounds3 80,000 10,000 310,000 400,000Gregory F. Chapados3 180,000 22,500 697,500 900,000G. Wilson Hughes 93,333 11,667 361,667 466,667Tina M. Pidgeon4 120,000 — 480,000 600,000 1 The Capex Spending target for 2015 is $166.7 million. If Capex Spending exceeds $174.2 million, the payout would reduce in a linear fashion tozero at $176.2 million.2 Mr. Duncan's incentive compensation target is calculated by multiplying the sum of his base salary, director cash compensation, estimatedvalue of the stock grant for service as a director, and incentive compensation ("Total Compensation") by the percentage increase in AdjustedEBITDA from Adjusted EBITDA in 2013 and adding that to his target incentive compensation. Therefore, the exact amount of Mr. Duncan's 2015Incentive Compensation Plan Target will not be known until the completion of fiscal year 2015.3 Incentive Compensation is paid out in the form of 50% cash and 50% restricted stock grants that vest at the end of three years. The number ofshares issued to Mr. Pounds and Mr. Chapados are determined by dividing the 50% of Incentive Compensation for shares by the price of ourClass A shares on December 31, 2012, which was $9.59. This arrangement is in place for Mr. Pounds and Mr. Chapados through 2017.4 Ms. Pidgeon's Incentive Compensation is paid out in the form of 75% cash and 25% restricted stock grants that vest 100% at the end of threeyears.The Compensation Committee may change the incentive compensation amounts between the goals at its discretion.Retention Incentives. Restricted stock grants are issued periodically to Named Executive Officers to encourage the executive to stay with theCompany and to help the Named Executive Officers stay focused on the long term performance of the Company. Mr. Chapados and Ms. Pidgeonreceived restricted stock grants during 2014 as retention incentives.Stock Option Plan. Options and awards, if granted to the Named Executive Officers, were granted pursuant to terms of our Stock OptionPlan. In particular, the exercise price for options in each instance was the closing price for our Class A common stock on the Nasdaq GlobalSelect Market on the day of the grant of the option. Options or awards, if granted, were granted contemporaneously with the approval of theCompensation Committee, typically early in the year in question or late in the previous year as described above. See "Part III – Item 11 –Compensation Discussion and Analysis: Elements of Compensation – Incentive Compensation Plan."With limited exceptions (one involving Mr. Duncan, a Named Executive Officer), since mid-2009 we have used restricted stock in place ofoptions. That is, on February 8, 2010, we granted an option for 150,000 shares of Class A common stock to Mr. Duncan. That option vested onFebruary 8, 2012.We adopted our stock option plan in 1986. It has been subsequently amended from time to time and presently is our Stock Option Plan, i.e., ourAmended and Restated 1986 Stock Option Plan. Under our Stock Option Plan, we are authorized to grant awards and options to purchase sharesof Class A common stock to selected officers, directors and other employees of, and consultants or advisors to, the Company and itssubsidiaries. The options are more specifically referred to as nonstatutory stock options or incentive stock options within Section 422 of theInternal Revenue Code of 1986, as amended ("Internal Revenue Code"). In addition, under the Stock Option Plan restricted stock awards may begranted as further described below. The selection of grantees for options and awards under the plan is made by our Compensation Committee.59Table of ContentsThe number of shares of Class A common stock allocated to the Stock Option Plan is 15.7 million shares. The number of shares for whichoptions or awards may be granted is subject to adjustment upon the occurrence of stock dividends, stock splits, mergers, consolidations andcertain other changes in corporate structure or capitalization. As of December 31, 2014, there were 0.3 million shares subject to outstandingoptions under the Stock Option Plan, 1.8 million shares granted subject to vesting, 4.1 million share grants had vested, 8.6 million shares hadbeen issued upon the exercise of options under the plan, 1.5 million shares repurchased by the plan and 2.4 million shares remained available foradditional grants under the plan.Restricted stock awards granted under the Stock Option Plan may be subject to vesting conditions based upon service or performance criteria asthe Compensation Committee may specify. These specifications may include attainment of one or more performance targets. Shares acquiredpursuant to such an award may not be transferred by the participant until vested. Unless otherwise provided by the Compensation Committee, aparticipant will forfeit any shares of restricted stock where the restrictions have not lapsed prior to the participant's termination of service withus. Participants holding restricted stock will have the right to vote the shares and to receive dividends paid, if any. However, those dividends orother distributions paid in shares will be subject to the same restrictions as the original award.Our Compensation Committee selects each grantee and the time of grant of an option or award and determines the terms of each grant, includingthe number of shares covered by each grant and the exercise price. In selecting a participant, as well as in determining these other terms andconditions of each grant, our Compensation Committee takes into consideration such factors as it deems, in its sole discretion, relevant inconnection with accomplishing the purpose of the plan.Under our Stock Option Plan, our authority to modify or amend the plan is subject to prior approval of our shareholders only in cases of increasingthe number of shares of our stock allocated to, and available and reserved for, issuance under the plan, changing the class of persons eligible toreceive incentive stock options or where shareholder approval is required under applicable law, regulation or rule. One such law requiringshareholder approval before the Company may rely on it is Section 162(m) of the Internal Revenue Code.Subject to these limitations, the Company may terminate or amend the Stock Option Plan at any time. However, no termination or amendmentmay affect any outstanding option or award unless expressly provided by the Compensation Committee. In any event, no termination oramendment of the plan may adversely affect an outstanding option or award without the consent of the participant unless necessary to complywith applicable law, regulation or rule.With limited exception, no maximum or minimum exists with regard to the amount, either in dollars or in numbers, of options that may be exercisedin any year, either by a single optionee or by all optionees under our Stock Option Plan. At the 2002 annual meeting, our shareholders approvedan amendment to the plan placing a limitation on accumulated grants of options of not more than 500,000 shares of Class A common stock peroptionee per year.With these exceptions, there are no fixed limitations on the number or amount of securities being offered, other than the practical limitationsimposed by the number of employees eligible to participate in the plan and the total number of shares of stock authorized and available for grantingunder the plan. Shares covered by options which have terminated or expired for any reason prior to their exercise are available for grant of newoptions pursuant to the plan.Perquisites. The Company provides certain perquisites to its Named Executive Officers. The Compensation Committee believes theseperquisites are reasonable and appropriate and consistent with our awareness of perquisites offered by similar publicly traded companies. Theperquisites assist in attracting and retaining the Named Executive Officers and, in the case of certain perquisites, promote health, safety andefficiency of our Named Executive Officers. These perquisites are as follows:•Use of Company Leased Aircraft – The Company permits employees, including the Named Executive Officers, to use Company aircraftfor personal travel for themselves and their guests. Such travel generally is limited to a space available basis on flights that are otherwisebusiness-related. Where a Named Executive Officer, or a guest of that officer, flies on a space available basis, the additional variablecost to the Company (such as fuel, catering, and landing fees) is de minimus. As a result, no amount is reflected in60Table of Contentsthe Summary Compensation Table for that flight. Where the additional variable cost to the Company occurs on such a flight for solelypersonal purposes of that Named Executive Officer or guest, that cost is included in the Summary Compensation Table entry for thatofficer. Because it is rare for a flight to be purely personal in nature, fixed costs (such as hangar expenses, crew salaries and monthlyleases) are not included in the Summary Compensation Table. In any case, in the event such a cost is non-deductible by the Companyunder the Internal Revenue Code, the value of that lost deduction is included in the Summary Compensation Table entry for that NamedExecutive Officer. When employees, including the Named Executive Officers, use Company aircraft for such travel they are attributedwith taxable income in accordance with regulations pursuant to the Internal Revenue Code. The Company does not "gross up" orreimburse an employee for taxes he or she owes on such attributed income. The variable cost of the aircraft for personal travel, if any, isincluded in the respective entries in the Summary Compensation Table. See "Part III – Item 11 – Executive Compensation: SummaryCompensation Table."•Enhanced Long Term Disability Benefit – The Company provides the Named Executive Officers and other senior executive officers ofthe Company with an enhanced long term disability benefit. This benefit provides a supplemental replacement income benefit of 60% ofaverage monthly compensation capped at $10,000 per month. The normal replacement income benefit applying to other of our employeesis capped at $5,000 per month.•Enhanced Short Term Disability Benefit – The Company provides the Named Executive Officers and other senior executive officers ofthe Company with an enhanced short term disability benefit. This benefit provides a supplemental replacement income benefit of 66 2/3%of average monthly compensation, capped at $2,300 per week. The normal replacement income benefit applying to other of ouremployees is capped at $1,150 per week.•Miscellaneous – Aside from benefits offered to its employees generally, the Company provided miscellaneous other benefits to itsNamed Executive Officers including the following (see "Part III – Item 11 – Executive Compensation: Summary Compensation Table –Components of 'All Other Compensation'"):◦Success Sharing – An incentive program offered to all of our employees that shares 15% of the excess earnings before interest,taxes, depreciation, amortization and share based compensation expense over the highest previous year ("Success Sharing").◦Board Fees – Provided to Mr. Duncan as one of our directors. The Compensation Committee believes that it is appropriate toprovide such board fees to Mr. Duncan given the additional oversight responsibilities and the accompanying liability incumbentupon members of our board. In determining the appropriate amount of overall compensation payable to Mr. Duncan in hiscapacity as Chief Executive Officer, the Compensation Committee does take into account any such board fees that are payableto Mr. Duncan. This monitoring of Mr. Duncan's overall compensation package for services rendered as Chief Executive Officerand as a director is done to ensure that Mr. Duncan is not being doubly compensated for the same services rendered to theCompany.Retirement and Welfare Benefits – GCI 401(k) Plan. In January 1987, we adopted an Employee Stock Purchase Plan (“GCI 401(k) Plan”)qualified under Section 401 of the Internal Revenue Code of 1986. The GCI 401(k) Plan provides for acquisition of GCI’s Class A common stock atmarket value as well as various mutual funds. We may match a percentage of the employees' contributions up to certain limits. Named ExecutiveOfficers may, along with our employees generally, participate in our GCI 401(k) Plan in which we may provide matching contributions inaccordance with the terms of the plan.As of December 31, 2014, there remained 4,668,651 shares of Class A and 463,989 shares of Class B common stock allocated to our GCI 401(k)Plan and available for issuance by us or otherwise acquisition by the plan for the benefit of participants in the plan.– Deferred Compensation Plan and Arrangements. The Company provides to certain of our employees, including our executive officers andNamed Executive Officers, opportunities to defer certain compensation under our nonqualified, unfunded, deferred compensation plan ("DeferredCompensation Plan"). In addition, we offer to our executive officers and to certain of our Named Executive Officers nonqualified, deferredcompensation arrangements more specifically fashioned to the needs of the officer and us ("Deferred Compensation Arrangements"). During 2014,none of our officers participated in the Deferred Compensation Plan. However,61Table of Contentsduring 2014, Mr. Hughes, a Named Executive Officer, participated in a Deferred Compensation Arrangement specifically fashioned to hisneeds. This Deferred Compensation Arrangement enables the individuals to defer compensation in excess of limits that apply to qualified plans,like our GCI 401(k) Plan, and to pursue other income tax goals which they set for themselves.Based upon its review of the Deferred Compensation Arrangement, our Compensation Committee concluded that the benefits provided are inreasonable and an important tool in retaining the executive officer involved with the arrangements.– Welfare Benefits. With the exception of the enhanced long term and short term disability benefits described previously, the Company providedto the Named Executive Officers the same health and welfare benefits provided generally to all other employees of the Company at the samegeneral premium rates as charged to those employees. The cost of the health and welfare programs is subsidized by the Company for all eligibleemployees including the Named Executive Officers.Performance Rewarded –Our Compensation Program is, in large part, designed to reward individual performance. What constitutes performance varies from officer toofficer, depending upon the nature of the officer's responsibilities. Consistent with the Compensation Program, the Company identified keybusiness metrics and established defined targets related to those metrics for each Named Executive Officer. In the case of each NamedExecutive Officer, the targets were regularly reviewed by management, from time to time, and provided an immediate and clear picture ofperformance and enabled management to respond quickly to both potential problems as well as potential opportunities. The CompensationProgram also was used to establish and track corresponding applicable targets for individual management employees.In 2014, the Compensation Program was used in the development of each Named Executive Officer's individual performance goals andestablished incentive compensation targets. The Compensation Committee evaluated the performance of each of the executive officers and thefinancial performance of the Company and awarded incentive compensation as described above. See "Part III – Item 11 – CompensationDiscussion and Analysis: Elements of Compensation – Incentive Compensation Plan."In 2014, our Compensation Committee determined to increase the cash component of Mr. Pounds’ base salary from $300,000 to $350,000effective January 1, 2014 and increase it to $400,000 effective January 1, 2015. In addition, the Compensation Committee increased Mr. Pounds'annual Incentive Compensation target from $200,000 to $300,000 effective January 1, 2014 and to $400,000 effective January 1, 2015. Theincreases to Mr. Pounds' base salary and Incentive Compensation are to compensate him for the additional responsibilities resulting from thegrowth of the Company. The amounts disclosed under "Part III – Item 11 – Incentive Compensation – 2014 Incentive Compensation Targets"reflect the increase to Mr. Pounds’ 2014 incentive compensation target.Timing of Equity Awards –Overview. Timing of equity awards under our Director Compensation Plan and equity awards under our Compensation Program varies with theplan or portion of that program. However, the Company does not, and has not in the past, timed its release of material nonpublic information forpurposes of affecting the value of equity compensation. Timing issues and our grant policy are described further below.Director Compensation Plan. As a part of the Director Compensation Plan, we grant awards of our common stock to board members, includingthose persons who may also be serving as one or more of our executive officers. Mr. Duncan, a board member and Named Executive Officer, hasbeen granted such awards in the past. These awards are made annually in June of each year in accordance with the terms of the DirectorCompensation Plan. The awards are made through our Stock Option Plan. See "Part III – Item 11 – Compensation Discussion andAnalysis: Elements of Compensation – Stock Option Plan."Incentive Compensation Plan. As a part of our Compensation Program, from time to time, we grant awards in our Class A common stock to ourexecutive officers, including the Named Executive Officers. In particular, awards are granted in conjunction with the agreements that we enter intowith Named Executive Officers pursuant to our Incentive Compensation Plan. The grants of such awards are typically made early in the year atthe time our board62Table of Contentsfinalizes the prior year incentive compensation plan payouts for each of the Named Executive Officers. All such awards are granted through theStock Option Plan. See "Part III – Item 11 – Compensation Discussion and Analysis: Elements of Compensation – Incentive CompensationPlan" and "– Elements of Compensation – Stock Option Plan."Stock Option Plan. As a part of our Compensation Program, from time to time, we grant stock awards in our Class A common stock to ourexecutive officers, including the Named Executive Officers, and to certain of our advisors. In the case of an executive officer, these awards maybe granted regardless of whether there is in place an agreement entered into with the officer under our Incentive Compensation Plan. In the caseof a new hire and where we choose to grant awards, the grant may be done at the time of hire. In all cases, regardless of the identity of thegrantee, the timing, amount and other terms of the grant of awards under our Stock Option Plan are determined in the sole discretion of ourCompensation Committee. See "Part III – Item 11 – Compensation Discussion and Analysis: Elements of Compensation – Stock Option Plan."In the event an executive level employee is hired or promoted during a year, that employee may be eligible to receive an award under the planspreviously described in this section. Grants of awards in this context may be made at the recommendation of management and only with action ofthe Compensation Committee.Grant Policy. Under our grant policy, all approved grants are granted effective the date they were approved by the committee and are priced atthe market value at the close of trading on that date. The terms of the award are then communicated immediately to the recipient.Tax and Accounting Treatment of Executive Compensation –In determining the amount and form of compensation granted to executive officers, including the Named Executive Officers, the Company takesinto consideration both tax treatment and accounting treatment of the compensation. Tax and accounting treatment for various forms ofcompensation is subject to changes in, and changing interpretations of, applicable laws, regulations, rulings and other factors not within theCompany's control. As a result, tax and accounting treatment is only one of several factors that the Company takes into account in designing thepreviously described elements of compensation.Compensation Policies and Practices in Relation to Our Risk Management –At the direction of our board, Company management has reviewed our compensation policies, plans and practices to determine whether theycreate incentives or encourage behavior that is reasonably likely to have a materially adverse effect on the Company. This effort included areview of our various employee compensation plans and practices as described elsewhere in this report. See "Part III – Item 11 – CompensationDiscussion and Analysis: Process."The purpose of the review was to evaluate risks and the internal controls we have implemented to manage those risks. The controls includemultiple performance metrics, corporate-wide financial measures, statutory clawbacks on equity awards, and board and board committee oversightand approvals.In completing this review, our board and management believe risks created by our compensation policies, plans and practices that createincentives likely to have a material adverse effect on us are remote.Shareholder Advisory Votes on Executive CompensationAt our 2014 annual meeting, our shareholders adopted a non-binding proposal pertaining to executive compensation of our Named ExecutiveOfficers. Our board anticipates placing before our shareholders a proposal on executive compensation at our 2017 annual shareholder meeting.Our board views decisions as to compensation of Company named executive officers, including but not limited to those for 2014, as itsresponsibility. Our board takes this responsibility seriously and has gone to considerable effort to establish and implement a process fordetermining executive compensation as described elsewhere in this report. See "Part III – Item 11 – Compensation Discussion and Analysis."63Table of ContentsOur board carefully considers all proposals from our shareholders. However, in light of its responsibilities to the Company, our board may or maynot follow the advice of those shareholder votes.Our board contemplates next placing before our shareholders a proposal dealing with the frequency of shareholder advisory votes on executivecompensation of our named executive officers during our 2017 annual shareholder meeting.Executive CompensationSummary Compensation Table –As of December 31, 2014, the Company did not have employment agreements with any of the Named Executive Officers. The following tablesummarizes total compensation paid or earned by each Named Executive Officer for fiscal years 2014, 2013 and 2012. The process followed bythe Compensation Committee in establishing total compensation for each Named Executive Officer as set forth in the table is described elsewherein this report. See "Part III – Item 11 – Compensation Discussion and Analysis."Summary Compensation TableName andPrincipal PositionYearSalary1($)Bonus($)NonequityIncentive PlanCompen-sation($)StockAwards2($)OptionAwards2($)Change inPension Valueand NonqualifiedDeferredCompensationEarnings3($)All OtherCompensation($)4Total($)Ronald A. Duncan5President and ChiefExecutive Officer2014925,000—1,087,2161,093,8626——86,2283,192,3062013830,000—1,158,158523,3717——75,0002,586,5292012600,000—566,20931,100——67,0001,264,309Peter J. PoundsSenior Vice President,Chief Financial Officerand Secretary82014350,0002,2819174,50392,2896——21,426640,499Gregory F. ChapadosExecutive Vice Presidentand Chief Operating Officer2014450,000—499,1722,010,88910——23,4262,983,4872013347,917—542,654143,2867——21,5001,055,3572012300,000—169,223998,20810——19,0001,486,431G. Wilson HughesExecutive VicePresident ---Wireless2014487,5006,9019271,584599,3976——18,6231,384,0052013487,500—754,465285,08411—29619,5001,546,8452012487,500—229,2231,486,34211—2,27225,8752,231,212Tina M. PidgeonSenior Vice President,Chief Compliance Officer,General Counsel andGovernmental Affairs2014325,00036,1349472,3952,537,90512——23,4263,394,8602013275,00031,9809366,622248,78812——111,9131,034,3032012275,00023,8489162,500391,27212——224,3691,076,989________________________1 For 2012, 2013 and 2014, salary includes deferred compensation of $125,000 for Mr. Hughes.2 This column reflects the grant date fair values of awards of Class A common stock, restricted stock awards or stock options granted in thefiscal year indicated which were computed in accordance with Financial Accounting Standards Board ("FASB") Accounting StandardsCodification Topic 718, Compensation – Stock Options ("ASC Topic 718"). Assumptions used in the calculation of these amounts are set forthin Note 9 of "Part II – Item 8 – Consolidated Financial Statements and Supplementary Data."3 The amount shown represents the above-market earnings on nonqualified deferred compensation plan balances. Above market-earnings isdefined as earnings in excess of 120% of the long-term monthly applicable federal rate (AFR).4 See, "Components of 'All Other Compensation'" table displayed below for more detail.5 In 2012, Mr. Duncan received $81,100 in compensation for service on our board in the form of $50,000 in director fees and a stock awardvalued at $31,100. In 2013, Mr. Duncan received $106,450 in compensation for64Table of Contentsservice on our board in the form of $57,500 in director fees and a stock award valued at $43,950. In 2014, Mr. Duncan received $148,625 incompensation for service on our board in the form of $65,000 in director fees and a stock award valued at $83,625.6 The Stock Awards granted during 2014 were for the Named Executive Officer's performance during 2013.7 The Stock Awards granted during 2013 were for the Named Executive Officer's performance during 2012.8 Compensation for Mr. Pounds is only provided for 2014 as he was not a Named Executive Officer in 2013 or 2012.9 The Bonus Compensation represents compensation paid pursuant to the Incentive Compensation Plan in excess of the target payment underthe plan.10 In 2012, Mr. Chapados received a stock award with a grant date fair value of $376,208 for his performance during 2011 and a stock award witha grant date fair value of $622,000 upon his promotion to Chief Operating Officer. In 2014, Mr. Chapados received a stock award with a grantdate fair value of $551,389 for his performance during 2013 and a stock award with a grant date fair value of $1,459,500 as a retentionincentive.11 In 2012, Mr. Hughes received a stock award with a grant date fair value of $486,338 for his performance during 2011 and a stock award with agrant date fair value of $1,000,004 to incentivize Mr. Hughes to stay to lead the integration of AWN. In 2013, Mr. Hughes received a stockaward with a grant date fair value of $194,084 for his perfomance during 2012 and a stock award with a grant date fair value of $91,000 grantedupon the successful close of AWN.12 In 2012, Ms. Pidgeon received a stock award with a grant date fair value of $291,267 for her performance during 2011 and a stock award witha grant date fair value of $100,005 to incentivize Ms. Pidgeon to stay with the Company. In 2013, Ms. Pidgeon received a stock award with agrant date fair value of $157,788 for her perfomance during 2012 and a stock award with a grant date fair value of $91,000 granted upon thesuccessful close of AWN. In 2014, Ms. Pidgeon received a stock award with a grant date fair value of $348,655 for her performance during2013 and a stock award with a grant date fair value of $2,189,250 as a retention incentive.______________________The amounts reported under the "All Other Compensation" column are comprised of the following:Components of "All Other Compensation"Name and Principal PositionYearStockPurchasePlan1($)BoardFees($)SuccessSharing2($)Use ofCompanyLeasedAircraft3($)Miscellaneous($)Total($)Ronald A. Duncan201417,50065,000—3,728—86,228201317,50057,500———75,000201217,00050,000———67,000Peter J. Pounds201417,500—1,926—2,000421,426Gregory F. Chapados201417,500—1,926—4,000423,426 201317,500———4,000421,500 201217,000———2,000419,000G. Wilson Hughes201417,500—1,123——18,623201317,500———2,000419,500201217,000——7,8751,000425,875Tina M. Pidgeon201417,500—1,926—4,000423,426201317,500——91,4133,0004111,913201217,000——113,70293,6675224,369________________________65Table of Contents1 Amounts are contributions by us matching each employee's contribution. Matching contributions by us under our GCI 401(k) Plan areavailable to each of our full time employees with over one year of service. During 2014 and 2013, the match was based upon the lesser of$17,500 ($17,000 for 2012) or 10% of the employee's salary and the total of the employee's pre-tax and post-tax contributions to the plan. See"Part III – Item 11 – Compensation Discussion and Analysis: Elements of Compensation – Retirement and Welfare Benefits – GCI 401(k)Plan."2 See "Part III – Item 11 – Compensation Discussion and Analysis: Elements of Compensation – Perquisites."3 The value of use of Company leased aircraft is shown at the variable cost to the Company.4 Compensation for attending certain management meetings.5 Included in 2012 are $91,667 for vesting portion of a $275,000 signing bonus received in 2010 and $2,000 for attending certain managementmeetings._____________________Grants of Plan-Based Awards Table –The following table displays specific information on grants of options, awards and non-equity incentive plan awards under our CompensationProgram and, in addition, in the case of Mr. Duncan, our Director Compensation Plan, made to Named Executive Officers during 2014.Grants of Plan-Based Awards Estimated Future Payouts UnderNon-Equity Incentive Plan Awards Estimated Future Payouts UnderEquity Incentive Plan Awards All Other StockAwards:Number ofSharesof Stockor Units (#)All OtherOptionAwards:Number ofSecuritiesUnderlyingOptions (#)Exerciseor BasePrice ofOptionAwards($/Sh)Grant DateFair Value ofStock andOptionAwards1($)NameGrant DateThreshold($)Target($)Maximum($) Threshold(#)Target(#)Maximum(#)Ronald A. Duncan01/31/14--------- ---------103,8272------1,010,237 06/01/14--------- ---------7,5003------83,625Peter J. Pounds01/31/14--------- ---------9,4852------92,289Gregory F. Chapados01/31/14--------- ---------56,6692------551,389 01/31/14--------- ---------150,0004------1,459,500G. Wilson Hughes01/31/14--------- ---------61,6032------599,397Tina M. Pidgeon01/31/14--------- ---------35,8332------348,655 01/31/14--------- ---------225,0005------2,189,250______________________1 Computed in accordance with FASB ASC Topic 718.2 Represents the 50% portion of the 2013 incentive compensation paid in the form of restricted stock grants under our Incentive CompensationPlan that were not granted until 2014. Restricted stock awards are included in the "Stock Awards" column of the Summary CompensationTable above.3 Mr. Duncan's stock award was granted pursuant to the terms of our Director Compensation Plan. See "Part III – Item 11 – DirectorCompensation."4 Mr. Chapados received a restricted stock award of 150,000 shares as a retention incentive.5 Ms. Pidgeon received a restricted stock award of 225,000 shares as a retention incentive.____________________Outstanding Equity Awards at Fiscal Year-End Table –The following table displays specific information on unexercised options, stock that has not vested and equity incentive plan awards for each ofthe Named Executive Officers and outstanding as of December 31, 2014. Vesting of these options and awards varies for the Named ExecutiveOfficers as described in the footnotes to the table.66Table of ContentsOutstanding Equity Awards at Fiscal Year-End Option Awards1 Stock AwardsNameNumber ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable OptionExercisePrice ($) OptionExpirationDate Number ofShares orUnits of StockThat Have NotVested (#) Market Valueof Shares orUnits ofStock thatHave NotVested ($) Equity IncentivePlan Awards:Number ofUnearned Shares,Units or OtherRights That HaveNot Vested (#) Equity IncentivePlan Awards:Market or PayoutValue ofUnearned Shares,Units or OtherRights That HaveNot Vested ($)Ronald A. Duncan150,000 --- 5.32 2/8/2020 --- --- --- ------ --- --- --- 59,0422 811,8282 --- ------ --- --- --- 103,8273 1,427,6213 --- ---Peter J. Pounds--- --- --- --- 50,0004 687,5004 --- ------ --- --- --- 50,0005 687,5005 --- ------ --- --- --- 9,4853 130,4193 --- ---Gregory F. Chapados100,000 --- 7.95 1/9/2018 --- --- --- ------ --- --- --- 55,0006 756,2506 --- ------ --- --- --- 17,6462 242,6332 --- ------ --- --- --- 100,0007 1,375,0007 --- ------ --- --- --- 56,6693 779,1993 --- ------ --- --- --- 150,0008 2,062,5008 --- ---G. Wilson Hughes--- --- --- --- 58,9639 810,7419 --- ------ --- --- --- 23,9022 328,6532 --- ------ --- --- --- 61,6033 847,0413 --- ---Tina M. Pidgeon--- --- --- --- 19,4322 267,1902 --- ------ --- --- --- 35,8333 492,7043 --- ------ --- --- --- 225,00010 3,093,75010 --- ---_____________________1 Stock option awards generally vest over five years and expire ten years from grant date, except as noted in the footnotes below.2 Restricted stock vests on November 30, 2015.3 Restricted stock vests on November 30, 2016.4 Restricted stock vests on February 8, 2015.5 Restricted stock vests on December 7, 2017.6 Restricted stock vests on October 7, 2015.7 Restricted stock vests on June 3, 2016.8 Restricted stock vests 30,000 shares on January 1, 2015, 2016, 2017, 2018 and 2019, respectively.9 Restricted stock vests on December 31, 2015.10 Restricted stock vests 135,000 shares on January 1, 2017, 45,000 shares on January 1, 2018, and 45,000 shares on January 1, 2019._____________________67Table of ContentsOption Exercises and Stock Vested Table –The following table displays specific information on each exercise of stock options, stock appreciation rights, and similar instruments, and eachvesting of stock, including restricted stock, restricted stock units and similar instruments on an aggregate basis, for each of the Named ExecutiveOfficers during 2014:Option Exercises and Stock Vested Option Awards Stock AwardsNameNumber ofSharesAcquired onExercise (#)Value Realizedon Exercise($) Number ofSharesAcquired onVesting (#) Value Realizedon Vesting($)Ronald A. Duncan------ 62,332 697,495------ 7,5001 83,625Peter J. Pounds------ 1,103 13,435Gregory F. Chapados------ 5,000 54,450------ 33,590 409,126G. Wilson Hughes------ 43,423 528,892------ 58,962 810,728------ 10,000 110,000Tina M. Pidgeon------ 26,006 316,753------ 11,793 140,455------ 10,000 110,000___________________1 This stock award relates to Mr. Duncan's service as one of our directors._________________Potential Payments upon Termination or Change-in-Control –As of December 31, 2014, there were no compensatory plans or arrangements providing for payments to any of the Named Executive Officers inconjunction with any termination of employment or other working relationship of such an officer with us (including without limitation, resignation,severance, retirement or constructive termination of employment of the officer). Furthermore, as of December 31, 2014, there were no such plansor arrangements providing for payments to any of the Named Executive Officers in conjunction with a change of control of us or a change in suchan officer's responsibilities to us. However, the outstanding options and awards for each of our Named Executive Officers would vest upon his orher disability, planned retirement or death, or could vest upon a change-in-control of the Company.Nonqualified Deferred CompensationDeferred Compensation Plan –We established our Deferred Compensation Plan in 1995 to provide a means by which certain of our employees may elect to defer receipt ofdesignated percentages or amounts of their compensation and to provide a means for certain other deferrals of compensation. Employees eligibleto participate in our Deferred Compensation Plan are determined by our board. We may, at our discretion, contribute matching deferrals inamounts as we select.Participants immediately vest in all elective deferrals and all income and gain attributable to that participation. Matching contributions and allincome and gain attributable to them vest on a case-by-case basis as determined by us. Participants may elect to be paid in either a single lump-sum payment or annual installments over a period not to exceed ten years. Vested balances are payable upon termination of employment,unforeseen emergencies, death or total disability of the participant or change of control of us or our insolvency. Participants68Table of Contentsbecome our general unsecured creditors with respect to deferred compensation benefits of our Deferred Compensation Plan.None of our Named Executive Officers participated in our Deferred Compensation Plan during 2014.Deferred Compensation Arrangements –We have, from time to time, entered into Deferred Compensation Arrangements with certain of our executive officers, including one of the NamedExecutive Officers. These arrangements are negotiated with individual officers on a case-by-case basis. The status of our DeferredCompensation Arrangements with our Named Executive Officers during 2014 is summarized for each of our Named Executive Officers in thefollowing table, and further descriptions of them are provided following the table.Nonqualified Deferred CompensationName ExecutiveContributionsin Last FY($) RegistrantContributionin Last FY($) AggregateEarnings (Loss)in Last FY($) AggregateWithdrawals/Distributions($) AggregateBalanceat Last FY($)Ronald A. Duncan --- --- --- --- ---Peter J. Pounds --- --- --- --- ---Gregory F. Chapados --- --- --- --- ---G. Wilson Hughes 125,000 --- 218,899 715,303 2,489,807Tina M. Pidgeon --- --- --- --- ---Mr. Hughes' Deferred Compensation Arrangement with us consists of three components. The first component consisted of deferred compensationinvested in 26,270 shares of Company Class A common stock. The second component is $1,458,595 accrued at year end of which $125,000 insalary were deferred and $121,236 of interest were accrued during 2014. This arrangement with us earns interest at the rate of 10% per yearbased upon the balance at the beginning of the year plus new salary deferrals during the year. The third component is $670,000 accrued at yearend of which $30,000 were accrued for 2014 interest. This arrangement earns interest at 7.5% per year based upon the original $400,000 that wasgiven to Mr. Hughes in consideration for his continued employment at the Company from January 1, 2006 through December 31, 2009.Mr. Hughes' Deferred Compensation Arrangement provides that at his discretion or at termination of employment, he is entitled to receive the fullamount owed in a lump sum, in monthly installments paid over a ten-year period, or in installments negotiated with the Company in accordancewith statutory requirements.Messrs. Duncan, Pounds, Chapados and Ms. Pidgeon did not participate in a Deferred Compensation Arrangement with us during 2014.Other than the Deferred Compensation Arrangements described above, no Named Executive Officer was, as of December 31, 2014, entitled todefer any additional consideration. Any additional Deferred Compensation Arrangements would have to be separately negotiated with, and agreedto by, the Compensation Committee.Compensation Committee Interlocks and Insider ParticipationOur Compensation Committee is composed of four members of our board as identified elsewhere in this report. All of these members served onthe committee during all of 2014. See "Part III – Item 11 – Compensation Discussion and Analysis: Overview." The relationships of them to usare described elsewhere in this report. See "Part III – Item 10 – Identification," "Part III – Item 12 – Principal Shareholders" and "Part III – Item 13– Certain Transactions."69Table of ContentsCompensation Committee ReportThe Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis. Based upon thatreview and discussion, the Compensation Committee recommended to our board that the Compensation Discussion and Analysis be included inour 2014 annual report.Compensation CommitteeJerry A. Edgerton, ChairStephen M. BrettStephen R. MooneyJames M. SchneiderDirector CompensationThe following table sets forth certain information concerning the cash and non-cash compensation earned by our directors ("Director CompensationPlan"), each for services as a director during the year ended December 31, 2014:2014 Director Compensation1 Name FeesEarnedorPaid inCash($) StockAwards2($) OptionAwards($) Non-EquityIncentive PlanCompensation($) Change inPensionValue and NonqualifiedDeferredCompensationEarnings($) All OtherCompensation($) Total($)Stephen M. Brett 65,000 83,625 — — — — 148,625Bridget L. Baker 65,000 83,625 — — — — 148,625Jerry A. Edgerton 65,000 83,625 — — — — 148,625Scott M. Fisher 65,000 83,625 — — — — 148,625William P. Glasgow 65,000 83,625 — — — — 148,625Mark W. Kroloff 65,000 83,625 — — — — 148,625Stephen R. Mooney 90,000 83,625 — — — — 173,625James M. Schneider 65,000 83,625 — — — — 148,625_______________________1 Compensation to Mr. Duncan as a director is described elsewhere in this report. See "Part III – Item 11 – Executive Compensation" and"Compensation Discussion and Analysis."2 Each director received a grant of awards of 7,500 shares of Company Class A common stock on June 1, 2014 (the grant date). The value ofthe shares on the date of grant was $11.15 per share, i.e., the closing price of the stock on Nasdaq on that date and as calculated inaccordance with FASB ASC Topic 718._____________________Our initial Director Compensation Plan was adopted in 2004 by our board to acknowledge and compensate, from time to time, directors on theboard for ongoing dedicated service. During 2014, the Director Compensation Plan provided for $65,000 per year for all Directors with theexception of Mr. Mooney, Audit Committee chair, who will receive an additional $25,000 per year (paid quarterly).During 2014, the stock compensation portion of our Director Compensation Plan consisted of a grant of 7,500 shares of Class A common stock toa director for a year of service, or a portion of a year of service. Because the shares vest upon award, they are subject to taxation based upon thethen fair market value of the vested shares.Except for our Director Compensation Plan, during 2014 the directors on our board received no other direct compensation for serving on the boardand its committees. However, they were reimbursed for travel and out-of-pocket expenses incurred in connection with attendance at meetings ofour board and its committees.70Table of ContentsItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersSecurities Authorized for Issuance under Equity Compensation PlansThe following table sets forth, as of the end of 2014, information on equity compensation plans approved by our shareholders and separately suchplans not approved by our shareholders. The information is focused on outstanding options, warrants and rights; the only such plan is our StockOption Plan as approved by our shareholders.Equity Compensation Plan InformationPlan categoryNumber of securitiesto be issued upon exercise ofoutstanding options, warrants andrightsWeighted-averageexercise price ofoutstanding options,warrants and rights($)Number of securitiesremaining available for futureissuance under equity compensationplans (excluding securities reflectedin the second column)Equity compensation plansapproved by security holders308,2006.862,374,371Total:308,2006.862,374,371Ownership of CompanyPrincipal Shareholders –The following table sets forth, as of December 31, 2014 (unless otherwise noted), certain information regarding the beneficial ownership of ourClass A common stock and Class B common stock by each of the following:•Each person known by us to own beneficially 5% or more of the outstanding shares of Class A common stock or Class Bcommon stock.•Each of our directors.•Each of the Named Executive Officers.•All of our executive officers and directors as a group.All information with respect to beneficial ownership has been furnished to us by the respective shareholders.Name ofBeneficial Owner1Title ofClass2Amount andNature ofBeneficialOwnership(#) % of Class% of Total SharesOutstanding (Class A & B)2% CombinedVotingPower(Class A & B)2Stephen M. BrettClass A75,2503 ***Class B--- --- Ronald A. DuncanClass A1,531,4763,4 4.05.311.7Class B661,8064 20.9 Bridget L. BakerClass A12,5003 *** Class B--- --- Jerry A. EdgertonClass A46,7503 ***Class B--- --- 71Table of ContentsScott M. FisherClass A63,8343,5 *1.37.4Class B511,7165 16.2 William P. GlasgowClass A89,7943,6 ***Class B--- --- Mark W. KroloffClass A43,6003 ***Class B--- --- Stephen R. MooneyClass A63,9003 ***Class B--- --- James M. SchneiderClass A45,6503 ***Class B--- --- G. Wilson HughesClass A839,8667 2.22.01.2Class B2,6957 * Peter J. PoundsClass A115,972 ***Class B--- --- Gregory F. ChapadosClass A635,1818 1.71.5*Class B--- --- Tina M. PidgeonClass A356,6329 ***Class B--- --- Black Rock, Inc.40 East 52nd StreetNew York, New York 10022Class A4,073,995 10.79.95.9Class B--- --- Dimensional Fund Advisors LPPalisades West, Building One6300 Bee Cave RoadAustin, Texas 78746Class A2,384,42310 6.35.83.4Class B--- --- GCI 401(k) Plan2550 Denali St., Ste. 1000Anchorage, Alaska 99503Class A3,390,077 8.98.35.5Class B42,882 1.4 Gary Magnessc/o Raymond L. Sutton, Jr.303 East 17th Ave., Ste 1100Denver, Colorado 80203-1264Class A261,563 *1.76.6Class B433,924 13.7 Private ManagementGroup, Inc.15635 Alton Parkway,Suite 400Irvine, California 92606Class A3,007,590 7.97.34.3Class B--- --- John W. Stanton andTheresa E. Gillespie155 108th Avenue., N.E.,Suite 450Bellevue, Washington 98004Class A2,242,627 5.98.923.9Class B1,436,469 45.5 The Vanguard Group, Inc.100 Vanguard BlvdMalvern, Pennsylvania 19355Class A2,342,20111 6.25.73.4Class B--- --- MAST Capital Management, LLC and Mr.David J. Steinberg200 Clarendon Street51st FloorBoston, Massachusetts 02116Class A4,058,40812 10.79.95.8Class B--- --- All Directors and ExecutiveOfficers As a Group(17 Persons)Class A4,332,75213 11.513.323.1Class B1,176,21713 37.2 ______________________*Represents beneficial ownership of less than 1% of the corresponding class or series of stock.72Table of Contents1 Beneficial ownership is determined in accordance with Rule 13d-3 of the Exchange Act. Shares of our stock that a person has the right toacquire within 60 days of December 31, 2014 are deemed to be beneficially owned by such person and are included in the computation of theownership and voting percentages only of such person. Each person has sole voting and investment power with respect to the sharesindicated, except as otherwise stated in the footnotes to the table. Addresses are provided only for persons other than management who ownbeneficially more than 5% of the outstanding shares of Class A or B common stock. The Class A shares do not include the number of ClassB shares owned although the Class B shares are convertible on a share-per-share basis into Class A shares.2 "Title of Class" includes our Class A common stock and Class B common stock. "Amount and Nature of Beneficial Ownership" and "% ofClass" are given for each class of stock. "% of Total Shares Outstanding" and "% Combined Voting Power" are given for the combination ofoutstanding Class A common stock and Class B common stock, and the voting power for Class B common stock (10 votes per share) isfactored into the calculation of that combined voting power.3 Includes 7,500 shares of our Class A common stock granted to each of those persons pursuant to the Director Compensation Plan forservices performed during 2014.4 Includes 169,522 shares of Class A common stock and 6,162 shares of Class B common stock allocated to Mr. Duncan under the GCI 401(k)Plan as of December 31, 2014. Includes 150,000 shares of Class A common stock subject to stock options granted under the Stock OptionPlan to Mr. Duncan which he has the right to acquire within 60 days of December 31, 2014 by exercise of the stock options. Does not include55,560 shares of Class A common stock or 8,242 shares of Class B common stock held by the Amanda Miller Trust, with respect to whichMr. Duncan has no voting or investment power. Ms. Miller is Mr. Duncan's daughter, and Mr. Duncan disclaims beneficial ownership of theshares. Does not include 7,500 shares owned by the Neoma Lowndes Trust which Ms. Miller is a 50% beneficiary, with respect to which Mr.Duncan has no voting or investment power and Mr. Duncan disclaims beneficial ownership of the shares. Does not include 63,186 shares ofClass A common stock or 27,020 shares of Class B common stock held by Dani Bowman, Mr. Duncan's wife, of which Mr. Duncan disclaimsbeneficial ownership. Does not include 10,000 shares of Class A common stock held by Missy, LLC which is 25% owned by Mr. Duncan,25% owned by Dani Bowman and 50% owned by a trust of which Mr. Duncan’s daughter is the 50% beneficiary, of which securities Mr.Duncan disclaims beneficial ownership (Mr. Duncan claims beneficial ownership of an additional 5,000 shares of Class A Common Stock heldby Missy, LLC. which are included within the shares for which Mr. Duncan has a pecuniary interest). Includes 990,868 shares of Class Acommon stock and 655,644 shares of Class B common stock pledged as security.5 Includes 13,484 shares of Class A and 511,716 shares of Class B common stock owned by Fisher Capital Partners, Ltd. of which Mr. Fisheris a partner.6 Does not include 158 shares owned by a daughter of Mr. Glasgow. Mr. Glasgow disclaims any beneficial ownership of the shares held by hisdaughter.7 Includes 19,422 shares of Class A common stock allocated to Mr. Hughes under the GCI 401(k) Plan, as of December 31, 2014. Includes305,890 shares of Class A common stock pledged as security. Excludes 26,270 shares held by the Company pursuant to Mr. Hughes'Deferred Compensation Agreement.8 Includes 16,299 shares of Class A common stock allocated to Mr. Chapados under the GCI 401(k) Plan, as of December 31, 2014. Includes100,000 shares of Class A common stock subject to stock options granted under the Stock Option Plan to Mr. Chapados which he has theright to acquire within 60 days of December 31, 2014 by exercise of those options.9 Includes 1,900 shares of Class A common stock allocated to Ms. Pidgeon under the GCI 401(k) Plan, as of December 31, 2014.10 As disclosed in Schedule 13G filed with the SEC on February 5, 2015, Dimensional Fund Advisors LP has sole voting power for 2,243,959shares of Class A common stock and sole dispositive power for 2,384,423 shares of Class A common stock.73Table of Contents11 As disclosed in Schedule 13G filed with the SEC on February 10, 2015, The Vanguard Group, Inc. has sole voting power of 55,968 shares ofClass A common stock, shared dispositive power for 50,568 shares of Class A common stock and sole dispositive power for 2,291,633shares of Class A common stock.12 As disclosed in Schedule 13G/A filed with the SEC on October 1, 2014.13 Includes 250,000 shares of Class A common stock which such persons have the right to acquire within 60 days of December 31, 2014 throughthe exercise of vested stock options. Includes 270,562 shares of Class A common stock and 6,162 shares of Class B common stockallocated to such persons under the GCI 401(k) Plan.______________________Item 13. Certain Relationships and Related Transactions, and Director IndependenceCertain TransactionsTransactions with Related Persons –Stanton Shareholdings, Registration Rights Agreement. As of December 31, 2014, John W. Stanton and Theresa E. Gillespie, husband andwife (collectively, "Stantons"), continued to be significant shareholders of our Class B common stock. As of that date, neither the Stantons northe Stantons' affiliates were our directors, officers, nominees for election as directors, or members of the immediate family of such directors,officers, or nominees.We are a party to a registration rights agreement ("Stanton Registration Rights Agreement") with the Stantons regarding all unregistered shares theStantons hold in our Class B common stock and any shares of our Class A common stock resulting from conversion of that Class B commonstock to Class A common stock. The basic terms of the Stanton Registration Rights Agreement are as follows. If we propose to register any ofour securities under the Securities Act of 1933, as amended ("Securities Act") for our own account or for the account of one or more of ourshareholders, we must notify the Stantons of that intent. In addition, we must allow the Stantons an opportunity to include the holder's shares("Stanton Registerable Shares") in that registration.Under the Stanton Registration Rights Agreement, the Stantons also have the right, under certain circumstances, to require us to register all or anyportion of the Stanton Registerable Shares under the Securities Act. The agreement is subject to certain limitations and restrictions, including ourright to limit the number of Stanton Registerable Shares included in the registration. Generally, we are required to pay all registration expenses inconnection with each registration of Stanton Registerable Shares pursuant to this agreement.The Stanton Registration Rights Agreement specifically states we are not required to effect any registration on behalf of the Stantons regardingStanton Registerable Shares if the request for registration covers an aggregate number of Stanton Registerable Shares having a market value ofless than $1.5 million. The agreement further states we are not required to effect such a registration for the Stantons where we have at that pointpreviously filed two registration statements with the SEC, or where the registration would require us to undergo an interim audit or prepare and filewith the SEC sooner than otherwise required financial statements relating to the proposed transaction. Finally, the agreement states we are notrequired to effect such a registration when in the opinion of our legal counsel a registration is not required in order to permit resale under Rule 144as adopted by the SEC pursuant to the Exchange Act.The Stanton Registration Rights Agreement provides that the first demand for registration by the Stantons must be for no less than 15% of thetotal number of Stanton Registerable Shares. However, the Stantons may take the opportunity to require us to include the Stanton RegisterableShares as incidental to a registered offering proposed by us.Duncan Leases. We entered into a long-term capital lease agreement in 1991 with the wife of GCI’s President and CEO for property occupied byus. The leased asset was capitalized in 1991 at the owner’s cost of $900,000 and the related obligation was recorded. The lease agreement wasamended in April 2008 and our existing capital lease asset and liability increased by $1.3 million to record the extension of this capital lease. Theamended lease terminates on September 30, 2026. The property consists of a building presently occupied by us. As of December74Table of Contents31, 2013, the payments on the lease were $23,932 per month. They continue at that rate through September 2014. In October 2014, thepayments on the lease will increase to $24,732 per month.In January 2001 we entered into an aircraft operating lease agreement with a company owned by GCI’s President and CEO. The lease wasamended several times, most recently in May 2011. The lease term of the aircraft may be terminated at any time by us upon 12 months’ writtennotice. The monthly lease rate of the aircraft is $132,000. In 2001, we paid a deposit of $1.5 million in connection with the lease. The deposit willbe repaid to us no later than six months after the agreement terminates.Review Procedure for Transactions with Related Persons –The following describes our policies and procedures for the review, approval or ratification of transactions in which we are to be a participant andwhere the amount involved in each instance exceeds $120,000 and in which any related person had or is to have a direct or indirect materialinterest ("Related Transactions"). Here, we use the term "related person" to mean any person who is one of our directors, a nominee for director,an immediate family member of one of our directors or executive officers, any person who is a holder of five percent or more of a class of ourcommon stock, or any immediate family member of such a holder.A related person who is one of our officers, directors or employees ("Employee") is subject to our Ethics Code. The Ethics Code requires theEmployee to act in the best interest of the Company and to avoid situations which may conflict with this obligation. The code specifically providesthat a conflict of interest occurs when an Employee's private interest interferes in any way with our interest. In the event an Employee suspectssuch a conflict, or even an appearance of conflict, he or she is urged by the Ethics Code to report the matter to an appropriate authority. TheEthics Code, Nominating and Corporate Governance Committee Charter and the Audit Committee Charter define that authority as being our ChiefFinancial Officer, the Nominating and Corporate Governance Committee, the Audit Committee (in the context of suspected illegal or unethicalbehavior-related violations pertaining to accounting, or internal controls on accounting or audit matters), or the Employee's supervisor within theCompany, as the case may be.The Ethics Code further provides that an Employee is prohibited from taking a personal interest in a business opportunity discovered through useof corporate position, information or property that properly belongs to us. The Ethics Code also provides that an Employee must not compete with,and in particular, must not use corporate position, information, or property for personal gain or to compete with, us.The Ethics Code provides that any waiver of its provisions for our executive officers and directors may be made only by our board and must bepromptly disclosed to our shareholders. This disclosure must include an identification of the person who received the waiver, the date of the grantof the waiver by our board, and a brief description of the circumstances and reasons under which it was given.The Ethics Code is silent as to the treatment of immediate family members of our Employees, holders of five percent or more of a class of ourstock, or the immediate family members of them. We consider such Related Transactions with such persons on a case-by-case basis, if at all, byanalogy to existing procedures as above described pertaining to our Employees.During 2014, there were no new Transactions with Related Persons. The leases described previously were entered into prior to the establishmentof the Ethics Code.Director IndependenceThe term Independent Director as used by us is an individual, other than one of our executive officers or employees, and other than any otherindividual having a relationship which in the opinion of our board would interfere with the exercise of independent judgment in carrying out theresponsibilities of a director. See "Part III – Item 10 – Audit Committee, Audit Committee Financial Expert."Mr. Brett, our Chairman of the Board, while in that capacity an officer under our Bylaws and responsible for the conduct of our board meetings andshareholder meetings when present, is considered by our board to have no75Table of Contentsgreater influence on our affairs or authority to act on behalf of us than any of the non-executive directors on our board.Our board believes each of its members satisfies the definition of an Independent Director, with the exception of Mr. Duncan who is an officer andemployee of the Company. That is, in the case of all other board members, our board believes each of them is an individual having a relationshipwhich does not interfere with the exercise of independent judgment in carrying out the member's director responsibilities to us.Item 14. Principal Accountant Fees and ServicesOverviewOn March 5, 2015, our Audit Committee approved the appointment of Grant Thornton as the Company’s External Accountant for 2015. Also onthat date, our board ratified that appointment by the Audit Committee.Pre-Approval Policies and ProceduresWe have established as policy, through the adoption of the Audit Committee Charter that, before our External Accountant is engaged by us torender audit services, the engagement must be approved by the Audit Committee.Our Audit Committee Charter provides that our Audit Committee is directly responsible for appointment, compensation, retention, oversight,qualifications and independence of our External Accountant. Also under our Audit Committee Charter, all audit services provided by our ExternalAccountant must be pre-approved by the Audit Committee.Our pre-approval policies and procedures with respect to Non-Audit Services include as a part of the Audit Committee Charter that the AuditCommittee may choose any of the following options for approving such services:•Full Audit Committee – The full Audit Committee can consider each Non-Audit Service.•Designee – The Audit Committee can designate one of its members to approve a Non-Audit Service, with that member reportingapprovals to the full committee.•Pre-Approval of Categories – The Audit Committee can pre-approve categories of Non-Audit Services. Should this option be chosen,the categories must be specific enough to ensure both of the following –◦The Audit Committee knows exactly what it is approving and can determine the effect of such approval on auditor independence.◦Management will not find it necessary to decide whether a specific service falls within a category of pre-approved Non-AuditService.The Audit Committee's pre-approval of Non-Audit Services may be waived under specific provisions of the Audit Committee Charter. Theprerequisites for waiver are as follows: (1) the aggregate amount of all Non-Audit Services constitutes not more than 5% of the total amount ofrevenue paid by us to our External Accountant during the fiscal year in which those services are provided; (2) the service is originally thought to bea part of an audit by our External Accountant; (3) the service turns out to be a Non-Audit Service; and (4) the service is promptly brought to theattention of the Audit Committee and approved prior to completion of the audit by the committee or by one or more members of the committee whoare members of our board to whom authority to grant such approvals has been delegated by the committee.During 2014, there were no waivers of our Audit Committee pre-approval policy.76Table of ContentsFees and ServicesThe aggregate fees billed to us by our External Accountant in each of these categories for each of 2014 and 2013 are set forth as follows:External Accountant Auditor FeesType of Fees 2014 2013Audit Fees1 $1,911,838 2,291,961Audit-Related Fees2 29,506 29,400Tax Fees3 121,380 147,761All Other Fees4 — —Total $2,062,724 2,469,122 1 Consists of fees for our annual financial statement audit, quarterly financial statement reviews, reviews of other filings by us with the SEC, auditof our internal control over financial reporting and for services that are normally provided by an auditor in connection with statutory andregulatory filings or engagements.2 Consists of fees for audit of the GCI 401(k) Plan and review of the related annual report on Form 11-K filed with the SEC.3 Consists of fees for review of our state and federal income tax returns and consultation on various tax advice and tax planning matters.4 Consists of fees for any services not included in the first three types of fees identified in the table.All of the services described above were approved in conformity with the Audit Committee's pre-approval policy.77Table of ContentsPart IVItem 15. Exhibits, Consolidated Financial Statement Schedules(1) Consolidated Financial StatementsPage No. Included in Part II of this Report: Reports of Independent Registered Public Accounting Firm79 Consolidated Balance Sheets, December 31, 2014 and 201382 Consolidated Income Statements, years ended December 31, 2014, 2013 and 201284 Consolidated Statements of Stockholders’ Equity, years ended December 31, 2014, 2013 and 201285 Consolidated Statements of Cash Flows, years ended December 31, 2014, 2013 and 201286 Notes to Consolidated Financial Statements87 (2) Consolidated Financial Statement Schedules Schedules are omitted, as they are not required or are not applicable, or the required information is shown in the applicablefinancial statements or notes thereto. (3) Exhibits12378Table of ContentsReport of Independent Registered Public Accounting FirmBoard of Directors and ShareholdersGeneral Communication, Inc.We have audited the accompanying consolidated balance sheets of General Communication, Inc. (an Alaska corporation) and subsidiaries (the“Company”) as of December 31, 2014 and 2013, and the related consolidated statements of income, stockholders’ equity, and cash flows for eachof the three years in the period ended December 31, 2014. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of GeneralCommunication, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of thethree years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’sinternal control over financial reporting as of December 31, 2014, based on criteria established in the 2013 Internal Control-Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 5, 2015 expressed anadverse opinion./s/ GRANT THORNTON LLPAnchorage, AlaskaMarch 5, 201579Table of ContentsReport of Independent Registered Public Accounting FirmBoard of Directors and ShareholdersGeneral Communication, Inc.We have audited the internal control over financial reporting of General Communication, Inc. (an Alaska corporation) and subsidiaries (the“Company”) as of December 31, 2014, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internalcontrol over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanyingManagement’s Report on Internal Control over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on theCompany’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting wasmaintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk thata material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, andperforming such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for ouropinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Acompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurancethat transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition ofthe company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or thatthe degree of compliance with the policies or procedures may deteriorate.A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is areasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on atimely basis. The following material weakness has been identified and included in management’s assessment.The Company identified a material weakness related to the inadequate design of internal controls over the calculation of income tax expense.In our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, theCompany has not maintained effective internal control over financial reporting as of December 31, 2014, based on criteria established in the 2013Internal Control-Integrated Framework issued by COSO.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidatedfinancial statements of the Company as of and for the year ended December 31, 2014. The material weakness identified above was considered indetermining the nature, timing, and extent of audit tests applied80Table of Contentsin our audit of the 2014 consolidated financial statements, and this report does not affect our report dated March 5, 2015, which expressed anunqualified opinion on those financial statements./s/ GRANT THORNTON LLPAnchorage, AlaskaMarch 5, 201581Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Amounts in thousands)December 31,ASSETS2014 2013Current assets: Cash and cash equivalents$15,402 44,971 Receivables (including $27,944 and $28,029 from a related party at December 31, 2014 and 2013,respectively)212,441 228,372Less allowance for doubtful receivables4,542 2,346Net receivables207,899 226,026 Deferred income taxes56,120 39,753Inventories17,032 10,347Prepaid expenses12,179 7,725Other current assets153 230Total current assets308,785 329,052 Property and equipment in service, net of depreciation1,013,242 969,578Construction in progress99,240 87,476Net property and equipment1,112,482 1,057,054Goodwill229,560 219,041Cable certificates191,635 191,635Wireless licenses86,347 91,400Other intangible assets, net of amortization66,015 71,435Deferred loan and senior notes costs, net of amortization of $8,644 and $6,545 at December 31, 2014 and2013, respectively10,949 12,129Other assets52,725 40,061Total other assets637,231 625,701Total assets$2,058,498 2,011,807 See accompanying notes to consolidated financial statements. Continued82Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Continued)(Amounts in thousands) December 31,LIABILITIES AND STOCKHOLDERS’ EQUITY 2014 2013Current liabilities: Current maturities of obligations under long-term debt and capital leases $8,722 9,301Accounts payable (including $7,447 and $11,221 to a related party at December 31, 2014 and 2013,respectively) 76,918 65,095Accrued payroll and payroll related obligations 32,803 29,855Deferred revenue 29,314 27,586Accrued liabilities 14,457 14,359Accrued interest 6,654 7,088Subscriber deposits 1,212 1,326Total current liabilities 170,080 154,610 Long-term debt, net 1,036,056 1,045,144Obligations under capital leases, excluding current maturities 66,499 66,261Obligation under capital lease due to related party, excluding current maturity 1,857 1,880Deferred income taxes 187,872 161,476Long-term deferred revenue 85,734 88,259Other liabilities 43,178 36,823Total liabilities 1,591,276 1,554,453 Commitments and contingencies Stockholders’ equity: Common stock (no par): Class A. Authorized 100,000 shares; issued 37,998 and 37,299 shares at December 31, 2014 and2013, respectively; outstanding 37,972 and 37,209 shares at December 31, 2014 and 2013,respectively 13,617 11,467Class B. Authorized 10,000 shares; issued and outstanding 3,159 and 3,165 shares at December31, 2014 and 2013, respectively; convertible on a share-per-share basis into Class A commonstock 2,668 2,673Less cost of 26 and 90 Class A common shares held in treasury at December 31, 2014 and 2013,respectively (249) (866)Paid-in capital 26,773 26,880Retained earnings 124,547 116,990Total General Communication, Inc. stockholders' equity 167,356 157,144Non-controlling interests 299,866 300,210Total stockholders’ equity 467,222 457,354Total liabilities and stockholders’ equity $2,058,498 2,011,807 See accompanying notes to consolidated financial statements.83Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESCONSOLIDATED INCOME STATEMENTSYEARS ENDED DECEMBER 31, 2014, 2013, AND 2012(Amounts in thousands, except per share amounts)2014 2013 2012Revenues: Non-related party$850,656 782,971 710,181Related party59,542 28,677 —Total revenues910,198 811,648 710,181 Cost of goods sold (exclusive of depreciation and amortization shown separatelybelow): Non-related party291,770 275,701 247,501Related party10,934 4,761 —Total cost of goods sold302,704 280,462 247,501 Selling, general and administrative expenses Non-related party289,674 268,026 241,079Related party3,973 3,039 2,169Total selling, general and administrative expenses293,647 271,065 243,248 Depreciation and amortization expense170,285 147,259 130,452Operating income143,562 112,862 88,980 Other income (expense): Interest expense (including amortization of deferred loan fees)(72,496) (69,725) (67,747)Other(1,793) (453) 17Other expense, net(74,289) (70,178) (67,730)Income before income tax expense69,273 42,684 21,250Income tax expense(10,029) (10,957) (12,088) Net income59,244 31,727 9,162Net income (loss) attributable to non-controlling interests51,687 22,321 (511)Net income attributable to General Communication, Inc.$7,557 9,406 9,673Basic net income attributable to General Communication, Inc. common stockholdersper Class A common share$0.18 0.23 0.23Basic net income attributable to General Communication, Inc. common stockholdersper Class B common share$0.18 0.23 0.23Diluted net income attributable to General Communication, Inc. common stockholdersper Class A common share$0.18 0.23 0.23Diluted net income attributable to General Communication, Inc. common stockholdersper Class B common share$0.18 0.23 0.23 See accompanying notes to consolidated financial statements. 84Table of Contents GENERAL COMMUNICATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITYYEARS ENDED DECEMBER 31, 2014, 2013 AND 2012(Amounts in thousands)Class ACommonStock Class BCommonStock Class Aand BSharesHeld inTreasury Paid-inCapital RetainedEarnings Non-controllingInterests TotalStockholders’EquityBalances at January 1, 2012$26,179 2,679 (2,225) 32,795 97,911 16,308 173,647Net income (loss)— — — — 9,673 (511) 9,162Common stock repurchasesand retirements(17,701) — 90 — — — (17,611)Shares issued under stock option plan2,118 — — — — — 2,118Issuance of restricted stock awards12,104 — — (12,104) — — —Share-based compensation expense— — — 5,072 — — 5,072Issuance of treasury shares related todeferred compensation payment— — 511 69 — — 580Investment by non-controlling interest— — — — — 16,461 16,461Other3 (3) 7 — — — 7Balances at December 31, 201222,703 2,676 (1,617) 25,832 107,584 32,258 189,436Net income— — — — 9,406 22,321 31,727Common stock repurchasesand retirements(17,338) — 130 — — — (17,208)Shares issued under stock option plan622 — — — — — 622Issuance of restricted stock awards5,477 — — (5,477) — — —Share-based compensation expense— — — 6,525 — — 6,525Issuance of treasury shares related todeferred compensation payment— — 621 — — — 621Investment by non-controlling interest— — — — — 267,642 267,642Distribution to non-controlling interests— — — — — (22,011) (22,011)Other3 (3) — — — — —Balances at December 31, 201311,467 2,673 (866) 26,880 116,990 300,210 457,354Net income— — — — 7,557 51,687 59,244Common stock repurchasesand retirements(6,850) — — — — — (6,850)Shares issued under stock option plan466 — — — — — 466Issuance of restricted stock awards8,529 — — (8,529) — — —Share-based compensation expense— — — 8,324 — — 8,324Issuance of treasury shares related todeferred compensation payment— — 617 98 — — 715Distribution to non-controlling interests— — — — — (50,000) (50,000)Adjustment to investment by non-controlling interest— — — — — (2,131) (2,131)Other5 (5) — — — 100 100Balances at December 31, 2014$13,617 2,668 (249) 26,773 124,547 299,866 467,222 See accompanying notes to consolidated financial statements.85Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2014, 2013 AND 2012(Amounts in thousands)2014 2013 2012Cash flows from operating activities: Net income$59,244 31,727 9,162Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense170,285 147,259 130,452Share-based compensation expense8,392 6,638 5,040Deferred income tax expense10,029 10,957 12,088Other noncash income and expense items9,933 5,231 6,651Change in operating assets and liabilities320 (42,178) (10,610)Net cash provided by operating activities258,203 159,634 152,783Cash flows from investing activities: Purchases of property and equipment(176,109) (180,554) (146,038)Purchase of equity investments(25,735) — —Purchases of other assets and intangible assets(11,018) (6,027) (6,152)Proceeds from the sale of equity investments6,180 — —Restricted cash5,871 23,997 (25,244)Purchase of businesses, net of cash received(2,514) (107,600) (1,874)Grant proceeds1,136 2,405 10,403Other49 1,428 —Net cash used in investing activities(202,140) (266,351) (168,905)Cash flows from financing activities: Repayment of debt and capital lease obligations(118,585) (98,152) (64,540)Borrowing on Senior Credit Facility89,000 261,000 70,000Distribution to non-controlling interest(50,000) (17,845) —Purchase of treasury stock to be retired(6,850) (17,208) (17,611)Proceeds from stock option exercises466 622 2,118Borrowing of other long-term debt421 1,770 4,729Payment of debt issuance costs(84) (2,990) —Investment by non-controlling interests— — 16,461Other— — 69Net cash provided by (used by) financing activities(85,632) 127,197 11,226Net increase (decrease) in cash and cash equivalents(29,569) 20,480 (4,896)Cash and cash equivalents at beginning of period44,971 24,491 29,387Cash and cash equivalents at end of period$15,402 44,971 24,491 See accompanying notes to consolidated financial statements. 86Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements(1) Business and Summary of Significant Accounting PrinciplesIn the following discussion, General Communication, Inc. (“GCI”) and its direct and indirect subsidiaries are referred to as “we,” “us” and “our.”(a)BusinessGCI, an Alaska corporation, was incorporated in 1979. We offer the following services primarily in Alaska:•Postpaid and prepaid wireless telephone services and sale of wireless telephone handsets and accessories,•Video services,•Internet access services,•Wholesale wireless, including postpaid and prepaid wireless plans for resale by other carriers and roaming for certain wirelesscarriers,•Origination and termination of wireline traffic for certain common carriers,•Local and long-distance telephone service,•Data network services,•Broadband services, including our SchoolAccess® offering to rural school districts, our ConnectMD® offering to rural hospitals andhealth clinics, and managed video conferencing,•Managed services to certain commercial customers,•Sales and service of dedicated communications systems and related equipment, and•Lease, service arrangements and maintenance of capacity on our fiber optic cable systems used in the transmission of serviceswithin Alaska and between Alaska and the remaining United States and foreign countries.(b)Basis of Presentation and Principles of ConsolidationOur consolidated financial statements include the consolidated accounts of GCI and its wholly owned subsidiaries, The Alaska WirelessNetwork, LLC ("AWN") of which we own a two-third interest and four variable interest entities (“VIEs”) for which we are the primarybeneficiary after providing certain loans and guarantees and have been prepared in accordance with accounting principles generallyaccepted in the United States of America ("GAAP"). These VIEs are Terra GCI Investment Fund, LLC (“TIF”), Terra GCI 2 InvestmentFund, LLC (“TIF 2”), Terra GCI 2-USB Investment Fund, LLC (“TIF 2-USB”) and Terra GCI 3 Investment Fund, LLC (“TIF 3”). TIF becamea VIE on August 30, 2011. TIF 2 and TIF 2-USB became VIEs on October 3, 2012. TIF 3 became a VIE on December 11, 2012. Wealso include in our consolidated financial statements non-controlling interests in consolidated subsidiaries for which our ownership is lessthan 100 percent. All significant intercompany transactions between non-regulated affiliates of our company areeliminated. Intercompany transactions generated between regulated and non-regulated affiliates of our company are not eliminated inconsolidation.(c)Non-controlling InterestsNon-controlling interests represent the equity ownership interests in consolidated subsidiaries not owned by us. Non-controlling interestsare adjusted for contributions, distributions, and earnings (loss) attributable to the non-controlling interest partners of the consolidatedentities. Income and loss is allocated to the non-controlling interests based on the respective partnership agreements.87Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (d)AcquisitionsAWNOn July 22, 2013, we closed the transactions under the Asset Purchase and Contribution Agreement (“Wireless Agreement”) and otherrelated agreements entered into on June 4, 2012 by and among Alaska Communications Systems Group, Inc. (“ACS”), GCI, ACSWireless, Inc., a wholly owned subsidiary of ACS, GCI Wireless Holdings, LLC, a wholly owned subsidiary of GCI, and AWN, pursuant towhich the parties agreed to contribute the respective wireless network assets of GCI, ACS and their affiliates to AWN. AWN provideswholesale services to GCI and ACS. GCI and ACS use the AWN network in order to continue to sell services to their respective retailcustomers. GCI and ACS continue to compete against each other and other wireless providers in the retail wireless market.Under the terms of the Wireless Agreement, we contributed our wireless network assets and certain rights to use capacity to AWN.Additionally, ACS contributed its wireless network assets and certain rights to use capacity to AWN. As consideration for the contributedbusiness assets and liabilities, ACS received $100.0 million in cash from GCI, a one-third ownership interest in AWN and entitlements toreceive preferential cash distributions totaling $190.0 million over the first four years of AWN’s operations ("Preference Period") contingenton the future cash flows of AWN. The preferential cash distribution is cumulative and may be paid beyond the Preference Period until theentire $190.0 million is paid. We expect ACS's preferential cash distributions to be higher than that which they would receive from theirone-third interest. We received a two-third ownership interest in AWN, as well as entitlements to receive all remaining cash distributionsafter ACS’s preferential cash distributions during the Preference Period. The distributions to each member are subject to adjustment basedon the number of ACS and GCI wireless subscribers, with the aggregate adjustment capped at $21.8 million for each member over thePreference Period. Following the Preference Period, we and ACS will receive distributions proportional to our ownership interests.We accounted for the acquisition of AWN using the acquisition method of accounting for business combinations with GCI treated as theacquiring entity. Accordingly, the assets and liabilities contributed by ACS were recorded at estimated fair values as of July 23, 2013,using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations.We used a combination of the discounted cash flows and market method to value the wireless licenses. We used the cost approach tovalue the acquired fixed assets and rights to use capacity assets. We used a discounted cash flow method to determine the fair value ofthe non-controlling interest. The assets and liabilities contributed to AWN by GCI were measured at their carrying amount immediatelyprior to the contribution as GCI is maintaining control over the assets and liabilities.88Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements The following table summarizes the final purchase price and the estimated fair value of ACS’s assets acquired and liabilities assumed,effective July 23, 2013 (amounts in thousands):Purchase price: PreviouslyReportedAdjustmentsFinal PurchasePrice AllocationCash consideration paid $100,000—100,000Fair value of the one-third ownership interest of AWN 267,642(2,131)265,511Total purchase price $367,642(2,131)365,511 Assets acquired and liabilities assumed: Acquired assets Current assets $16,9521116,963Property and equipment, including construction in progress 82,47313882,611Goodwill 140,0818,867148,948Wireless licenses 65,433(5,053)60,380Rights to use capacity 52,636(7,298)45,338Other assets 16,0781,20417,282Fair value of liabilities assumed (6,011)—(6,011)Total fair value of assets acquired and liabilities assumed $367,642(2,131)365,511We modified the initial preliminary AWN purchase price allocation during 2014 as noted in the table above due to additional informationreceived from ACS related to the allocation of ACS' network contributed to AWN that impacted the estimated fair value.Goodwill in the amount of $148.9 million was recorded as a result of the acquisition and assigned to our Wireless segment. Goodwill iscalculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economicbenefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill is primarily theresult of synergies expected from the combination. Other assets is primarily comprised of future capacity receivable.The acquisition resulted in additional revenues of $50.6 million for the year ended December 31, 2013. It is impracticable for us todetermine the amount of earnings of the acquired business included in our Consolidated Income Statement for the year ended December31, 2013, due to the significant transfer of personnel, fixed assets and other expenses into and between newly created and historical costcenters that has occurred subsequent to the acquisition.Unaudited pro forma financial information does not purport to be indicative of the actual results that would have occurred if the acquisitionhad actually been completed on January 1, 2012, nor is it necessarily indicative of the future revenue of the combined company. Thefollowing unaudited pro forma financial information is presented as if the acquisition occurred on January 1, 2012 (amounts in thousands): (unaudited) Years Ended December 31, 2013 2012Pro forma consolidated revenue$897,270 848,676Supplemental pro forma earnings have not been provided as it would be impracticable due to the nature of GCI's and ACS's respectivewireless operations prior to the business combination. GCI and ACS were unable to disaggregate the components of expenses related totheir wireless operations contributed to AWN89Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements and thus the amounts would require estimates so significant that the resulting information would not be meaningful.Transaction costs of $1.8 million and $2.9 million were recorded in selling, general and administrative expense in the years endedDecember 31, 2013 and 2012, respectively.Denali Media HoldingsEffective November 1, 2013 we closed the transactions under the asset purchase agreements, pursuant to which Denali Media Holdings,Corp., a wholly owned subsidiary of GCI, through its wholly owned subsidiaries, Denali Media Anchorage, Corp. and Denali MediaSoutheast, Corp., agreed to purchase three Alaska broadcast stations: CBS affiliate KTVA-TV of Anchorage and NBC affiliates KATH-TVin Juneau and KSCT-TV of Sitka, for a total of $7.6 million (“Media Agreements”). We accounted for the acquisitions using the acquisitionmethod of accounting for business combinations with GCI treated as the acquiring entity. We consider these business combinations to beimmaterial to our consolidated financial statements.(e)Recently Issued Accounting PronouncementsIn May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2014-09, Revenue fromContracts with Customers, or ASU 2014-09. This new standard provides guidance for the recognition, measurement and disclosure ofrevenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under GAAP.The standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption isnot permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluatingthe impact of the provisions of this new standard on our financial position and results of operations.(f)Regulatory AccountingWe account for the regulated operations of our incumbent local exchange carrier in accordance with the accounting principles for regulatedenterprises. This accounting recognizes the economic effects of rate regulation by recording cost and a return on investment as suchamounts are recovered through rates authorized by regulatory authorities. Accordingly, plant and equipment is depreciated over livesapproved by regulators and certain costs and obligations are deferred based upon approvals received from regulators to permit recovery ofsuch amounts in future years. Our cost studies and depreciation rates for our regulated operations are subject to periodic audits thatcould result in a change to recorded revenues.(g)Earnings per Common ShareWe compute net income per share of Class A and Class B common stock using the “two class” method. Therefore, basic net income pershare is computed by dividing net income applicable to common stockholders by the weighted average number of common sharesoutstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number ofcommon and dilutive common equivalent shares outstanding during the period. The computation of the dilutive net income per share ofClass A common stock assumes the conversion of Class B common stock to Class A common stock, while the dilutive net income pershare of Class B common stock does not assume the conversion of those shares. Additionally, in applying the “two-class” method,undistributed earnings are allocated to both common shares and participating securities. Our restricted stock grants are entitled todividends and meet the criteria of a participating security.Undistributed earnings for each year are allocated based on the contractual participation rights of Class A and Class B common shares asif the earnings for the year had been distributed. In accordance with our Articles of Incorporation, if and when dividends are declared onour common stock in accordance with Alaska corporate law, equivalent dividends shall be paid with respect to the shares of Class A andClass B common stock. Both classes of common stock have identical dividend rights and would therefore share equally in our net assetsin the event of liquidation. As such, we have allocated undistributed earnings on a proportionate basis.90Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Earnings per common share (“EPS”) and common shares used to calculate basic and diluted EPS consist of the following (amounts inthousands, except per share amounts): Year Ended December 31, 2014 Class A Class BBasic net income per share: Numerator: Allocation of undistributed earnings$6,980 577 Denominator: Weighted average common shares outstanding38,219 3,162Basic net income attributable to GCI common stockholders per common share$0.18 0.18 Diluted net income per share: Numerator: Allocation of undistributed earnings for basic computation$6,980 577Reallocation of undistributed earnings as a result of conversion of Class B to Class Ashares577 —Effect of share based compensation that may be settled in cash or shares— (2)Net income adjusted for allocation of undistributed earnings$7,557 575 Denominator: Number of shares used in basic computation38,219 3,162Conversion of Class B to Class A common shares outstanding3,162 —Unexercised stock options112 —Number of shares used in per share computation41,493 3,162Diluted net income attributable to GCI common stockholders per common share$0.18 0.1891Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Years Ended December 31, 2013 2012 Class A Class B Class A Class BBasic net income per share: Numerator: Allocation of undistributed earnings$8,678 728 8,938 735 Denominator: Weighted average common shares outstanding37,732 3,166 38,560 3,170Basic net income attributable to GCI commonstockholders per common share$0.23 0.23 0.23 0.23 Diluted net income per share: Numerator: Allocation of undistributed earnings for basiccomputation$8,678 728 8,938 735Reallocation of undistributed earnings as a resultof conversion of Class B to Class A shares728 — 735 —Reallocation of undistributed earnings as a resultof conversion of dilutive securities— (3) — (8)Effect of share based compensation that maybe settled in cash or shares— — (13) —Net income adjusted for allocationof undistributed earnings and effect of sharebased compensation that may be settled incash or shares$9,406 725 9,660 727 Denominator: Number of shares used in basic computation37,732 3,166 38,560 3,170Conversion of Class B to Class A commonshares outstanding3,166 — 3,170 —Unexercised stock options142 — 158 —Effect of share based compensation that maybe settled in cash or shares— — 231 —Number of shares used in per share computation41,040 3,166 42,119 3,170Diluted net income attributable to GCIcommon stockholders per common share$0.23 0.23 0.23 0.2392Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Weighted average shares associated with outstanding share awards for the years ended December 31, 2014, 2013 and 2012 which havebeen excluded from the computations of diluted EPS, because the effect of including these share awards would have been anti-dilutive,consist of the following (shares, in thousands): Years Ended December 31, 2014 2013 2012Shares associated with anti-dilutive unexercised stock options29 86 88Share-based compensation that may be settled in cash or shares, theeffect of which is anti-dilutive26 90 —Shares associated with contingent awards for the years ended December 31, 2014, 2013 and 2012, which have been excluded from thecomputations of diluted EPS because the contingencies of these awards have not been met at December 31, 2014, 2013 and 2012,consist of the following (shares in thousands): Years Ended December 31, 2014 2013 2012Shares associated with contingent awards— — 58(h)Common StockFollowing are the changes in issued common stock for the years ended December 31, 2014, 2013 and 2012 (shares, in thousands): Class A Class BBalances at January 1, 201239,296 3,171Class B shares converted to Class A2 (2)Shares issued upon stock option exercises320 —Share awards issued731 —Shares repurchased and retired(1,469) —Shares acquired to settle minimum statutory tax withholding requirements andsubsequently retired(337) —Other(9) —Balances at December 31, 201238,534 3,169Class B shares converted to Class A4 (4)Shares issued upon stock option exercises87 —Share awards issued680 —Shares repurchased and retired(1,822) —Shares acquired to settle minimum statutory tax withholding requirements andsubsequently retired(147) —Other(37) —Balances at December 31, 201337,299 3,165Class B shares converted to Class A6 (6)Shares issued upon stock option exercises51 —Share awards issued1,267 —Shares repurchased and retired(429) —Shares acquired to settle minimum statutory tax withholding requirements andsubsequently retired(196) —Balances at December 31, 201437,998 3,159GCI’s Board of Directors has authorized a common stock buyback program for the repurchase of GCI’s Class A and Class B commonstock in order to reduce the outstanding shares of Class A and Class B93Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements common stock. Under the common stock buyback plan approved by GCI’s Board of Directors in 2010 we are authorized to repurchase upto $200.0 million worth of GCI common stock, to increase our repurchase limit $5.0 million per quarter indefinitely and to use stock optionexercise proceeds to repurchase additional shares. If stock repurchases are less than the total approved quarterly amount the differencemay be carried forward and used to repurchase additional shares in future quarters. The cost of the repurchased common stock reducedCommon Stock on our Consolidated Balance Sheets.During the years ended December 31, 2014, 2013 and 2012 we repurchased 0.4 million, 1.8 million and 1.5 million shares, respectively, ofour Class A common stock under the stock buyback program at a cost of $4.2 million, $15.6 million and $14.0 million,respectively. Under this program we are currently authorized to make up to $122.2 million of repurchases as of December 31, 2014. Therepurchased stock was constructively retired as of December 31, 2014, 2013 and 2012.We expect to continue the repurchases for an indefinite period dependent on leverage, liquidity, company performance, and marketconditions and subject to continued oversight by GCI’s Board of Directors.(i)Redeemable Preferred StockWe have 1,000,000 shares of preferred stock authorized with no shares issued and outstanding at years ended December 31, 2014, 2013and 2012.(j)Treasury StockWe account for treasury stock purchased for general corporate purposes under the cost method and include treasury stock as acomponent of Stockholders’ Equity. Treasury stock purchased with intent to retire (whether or not the retirement is actually accomplished)is charged to Class A or Class B Common Stock.(k)Cash EquivalentsCash equivalents consist of certificates of deposit which have an original maturity of three months or less at the date acquired and arereadily convertible into cash.(l)Accounts Receivable and Allowance for Doubtful ReceivablesTrade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful receivables is our bestestimate of the amount of probable credit losses in our existing accounts receivable. We base our estimates on the aging of our accountsreceivable balances, financial health of specific customers, regional economic data, changes in our collections process, regulatoryrequirements and our customers’ compliance with Universal Service Administrative Company rules. We review our allowance for doubtfulreceivables methodology at least annually.Depending upon the type of account receivable our allowance is calculated using a pooled basis with an allowance for all accounts greaterthan 120 days past due or a specific identification method. When a specific identification method is used, potentially uncollectibleaccounts due to bankruptcy or other issues are reviewed individually for collectability. Account balances are charged off againstthe allowance when we feel it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposurerelated to our customers.(m)InventoriesWireless handset inventories are stated at the lower of cost or market (net realizable value). Cost is determined using the average costmethod. Handset costs in excess of the revenues generated from handset sales, or handset subsidies, are expensed at the time of sale.We do not recognize the expected handset subsidies prior to the time of sale because the promotional discount decision is made at thepoint of sale and/or because we expect to recover the handset subsidies through service revenue.Inventories of other merchandise for resale and parts are stated at the lower of cost or market. Cost is determined using the average costmethod.94Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (n)Property and EquipmentProperty and equipment is stated at cost. Construction costs of facilities are capitalized. Equipment financed under capital leases isrecorded at the lower of fair market value or the present value of future minimum lease payments at inception of the lease. Construction inprogress represents transmission equipment and support equipment and systems not placed in service on December 31, 2014, thatmanagement intends to place in service during 2015.Depreciation is computed using the straight-line method based upon the shorter of the estimated useful lives of the assets or the leaseterm, if applicable, in the following ranges:Asset CategoryAsset LivesTelephony transmission equipment and distribution facilities5-20 yearsFiber optic cable systems15-25 yearsCable transmission equipment and distribution facilities5-30 yearsSupport equipment and systems3-20 yearsTransportation equipment5-13 yearsProperty and equipment under capital leases12-20 yearsBuildings25 yearsCustomer premise equipment2-20 yearsStudio equipment10-15 yearsAmortization of property and equipment under capital leases is included in Depreciation and Amortization Expense on the ConsolidatedIncome Statements.Repairs and maintenance are charged to expense as incurred. Expenditures for major renewals and betterments are capitalized.Accumulated depreciation is removed and gains or losses are recognized at the time of sales or other dispositions of property andequipment.(o)Intangible Assets and GoodwillGoodwill, cable certificates (certificates of convenience and public necessity), wireless licenses and broadcast licenses are not amortized.Cable certificates represent certain perpetual operating rights to provide cable services. Wireless licenses represent the right to utilizecertain radio frequency spectrum to provide wireless communications services. Broadcast licenses represent the right to broadcasttelevision stations in certain areas. Goodwill represents the excess of cost over fair value of net assets acquired in connection with abusiness acquisition.All other amortizable intangible assets are being amortized over 2 to 20 year periods using the straight-line method.(p)Impairment of Intangibles, Goodwill, and Long-lived AssetsCable certificates, wireless licenses and broadcast licenses are treated as indefinite-lived intangible assets and are tested annually forimpairment or more frequently if events and circumstances indicate that the asset might be impaired. We are allowed to assessqualitative factors (“Step Zero”) in our annual test over our indefinite-lived intangible assets other than goodwill. The impairment test foridentifiable indefinite-lived intangible assets other than goodwill consists of a comparison of the estimated fair value of the intangible assetwith its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amountequal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the asset becomes its new accountingbasis. Impairment testing of our cable certificate and wireless license assets as of October 31, 2014 and 2013, used a direct discountedcash flow method. Impairment testing of our broadcast license assets as of October 31, 2014 used a direct discounted cash flow method.We did not perform an impairment test on our broadcast license assets during 2013 since we acquired them in November 2013 when weacquired the television stations pursuant to the Media Agreements. This approach requires us to make estimates and assumptionsincluding projected cash flows and discount rates. These estimates and assumptions could have a significant impact on whether animpairment charge is recognized and also the magnitude of any such impairment charge.95Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Our goodwill is tested annually for impairment, and is tested for impairment more frequently if events and circumstances indicate that theassets might be impaired. In our annual test of goodwill, we are allowed to use Step Zero to determine whether it is more likely than notthat goodwill is impaired. We chose not to apply Step Zero and chose to test for goodwill impairment using the traditional quantitative two-step process. The first step of the quantitative goodwill impairment test is used to identify potential impairment by comparing the fairvalue of a reporting unit with its carrying amount. To determine our reporting units, we evaluate the components one level below thesegment level and we aggregate the components if they have similar economic characteristics. As a result of this assessment, ourreporting units are the same as our two reportable segments. If the carrying amount of a reporting unit exceeds its fair value, the secondstep of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of thatgoodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss isrecognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount ofgoodwill that would be recognized in a business combination. We use an income approach to determine the fair value of our reportingunits for purposes of our goodwill impairment test. In addition, a market-based approach is used where possible to corroborate the fairvalues determined by the income approach. The income approach requires us to make estimates and assumptions including projectedcash flows and discount rates. These estimates and assumptions could have a significant impact on whether an impairment charge isrecognized and also the magnitude of any such impairment charge.We completed our annual review and no impairment charge was recorded for the years ended December 31, 2014, 2013 and 2012.Long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization are reviewed for impairmentwhenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverabilityof an asset group to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscountedfuture cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimatedundiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset groupexceeds the fair value of the asset group.(q)Amortization and Write-off of Loan FeesDebt issuance costs are deferred and amortized using the effective interest method. If a refinancing or amendment of a debt instrument isa substantial modification, all or a portion of the applicable debt issuance costs are written off. If a debt instrument is repaid prior to thematurity date we will write-off a proportional amount of debt issuance costs.(r)Other AssetsOther Assets primarily include future capacity receivable, broadcast licenses, equity investments that are accounted for using the equityor cost method, restricted cash, long-term deposits, prepayments, and non-trade accounts receivable.Under the terms of the Wireless Agreement, we acquired from ACS the rights to use additional network capacity which we may draw downin the future. The applicable portion of the future capacity receivable asset will be reclassified to the rights to use capacity asset when thecapacity is placed in service and amortized using the straight-line method over the remaining 20 year period.(s)InvestmentsWe hold investments in equity method and cost method investees. Investments in equity method investees are those for which we havethe ability to exercise significant influence but do not control and are not the primary beneficiary. Significant influence typically exists if wehave a 20% to 50% ownership interest in the venture unless persuasive evidence to the contrary exists. Under this method of accounting,we record our proportionate share of the net earnings or losses of equity method investees and a corresponding increase or decrease tothe investment balances. Cash payments to equity method investees such as additional investments, loans and advances and expensesincurred on behalf of investees, as well as payments from equity method investees such as dividends, distributions and repayments ofloans and advances are96Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements recorded as adjustments to investment balances. Investments in entities in which we have no control or significant influence areaccounted for under the cost method.We review our investment portfolio each reporting period to determine whether there are identified events or circumstances that wouldindicate there is a decline in the fair value that would be considered other than temporary. We recorded no impairment charges to equitymethod or cost method investments for the years ended December 31, 2014, 2013 and 2012.(t)Asset Retirement ObligationsWe record the fair value of a liability for an asset retirement obligation in the period in which it is incurred in Other Liabilities on theConsolidated Balance Sheets. When the liability is initially recorded, we capitalize a cost by increasing the carrying amount of the relatedlong-lived asset. In periods subsequent to initial measurement, changes in the liability for an asset retirement obligation resulting fromrevisions to either the timing or the amount of the original estimate of undiscounted cash flows are recognized. Over time, the liability isaccreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlementof the liability, we either settle the obligation for its recorded amount or incur a gain or loss upon settlement.The majority of our asset retirement obligations are the estimated cost to remove telephony transmission equipment and supportequipment from leased property. Following is a reconciliation of the beginning and ending aggregate carrying amounts of our liability forasset retirement obligations (amounts in thousands):Balance at December 31, 2012$16,280Liability incurred5,292Additions upon the close of AWN5,218Accretion expense77Liability settled(65)Balance at December 31, 201326,802Liability incurred4,268Accretion expense1,249Revision in estimate(355)Liability settled(24)Balance at December 31 2014$31,940During the years ended December 31, 2014 and 2013, we recorded additional capitalized costs of $4.3 million and $10.5 million,respectively, in Property and Equipment in Service, Net of Depreciation.Certain of our network facilities are on property that requires us to have a permit and the permit contains provisions requiring us to removeour network facilities in the event the permit is not renewed. We expect to continually renew our permits and therefore cannot estimateany liabilities associated with such agreements. A remote possibility exists that we would not be able to successfully renew a permit,which could result in us incurring significant expense in complying with restoration or removal provisions.(u)Revenue RecognitionAll revenues are recognized when the earnings process is complete. Revenue recognition is as follows:•Revenues generated from long-distance service usage and plan fees, Internet service excess usage, and managed services arerecognized when the services are provided,•We recognize unbilled revenues when the service is provided based upon minutes of use processed, and/or established rates, netof credits and adjustments,•Video service package fees, local access and Internet service plan fees, and data network revenues are billed in advance,recorded as Deferred Revenue on the balance sheet, and are recognized as the associated service is provided,97Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements •Certain of our wireless services offerings have been determined to be revenue arrangements with multiple deliverables. Revenuesare recognized as each element is earned based on objective evidence regarding the relative fair value of each element and whenthere are no undelivered elements that are essential to the functionality of the delivered elements. Revenues generated fromwireless service usage and plan fees are recognized when the services are provided. Revenues generated from the sale of wirelesshandsets and accessories are recognized when the amount is known and title to the handset and accessories passes to thecustomer. As the non-refundable, up-front activation fee charged to the customer does not meet the criteria as a separate unit ofaccounting, we allocate the additional arrangement consideration received from the activation fee to the handset (the delivereditem) to the extent that the aggregate handset and activation fee proceeds do not exceed the fair value of the handset. Anyactivation fees not allocated to the handset would be deferred upon activation and recognized as service revenue on a straight-linebasis over the expected customer relationship period,•The majority of our equipment sale transactions involve the sale of communications equipment with no other services involved.Such equipment is subject to standard manufacturer warranties and we do not manufacture any of the equipment we sell. In suchinstances, the customer takes title to the equipment generally upon delivery. We recognize revenue for such transactions whentitle passes to the customer and the revenue is earned and realizable. On certain occasions we enter into agreements to sell andsatisfactorily install or integrate telecommunications equipment for a fixed fee. Customers may have refund rights if the installedequipment does not meet certain performance criteria. We defer revenue recognition until we have received customer acceptanceper the contract or agreement, and all other required revenue recognition elements have been achieved. Revenues from contractswith multiple element arrangements, such as those including installation and integration services, are recognized as each elementis earned based on objective evidence regarding the relative fair value of each element and when there are no undelivered elementsthat are essential to the functionality of the delivered elements,•Technical services revenues are derived primarily from maintenance contracts on equipment and are recognized on a proratedbasis over the term of the contracts,•We account for fiber capacity Indefeasible Right to Use ("IRU") agreements as an operating lease or service arrangement and wedefer the revenue and recognize it ratably over the life of the IRU or as service is rendered,•Access revenue is recognized when earned. We participate in access revenue pools with other telephone companies. Such poolsare funded by toll revenue and/or access charges regulated by the Regulatory Commission of Alaska ("RCA") within the intrastatejurisdiction and the Federal Communications Commission (“FCC”) within the interstate jurisdiction. Much of the interstate accessrevenue is initially recorded based on estimates. These estimates are derived from interim financial information, availableseparation studies and the most recent information available about achieved rates of return. These estimates are subject toadjustment in future accounting periods as additional information becomes available. To the extent that a dispute arises overrevenue settlements, our policy is to defer revenue recognition until the dispute is resolved,•We receive grant revenue for the purpose of building communication infrastructure in rural areas. We defer the revenue andrecognize it over the life of the asset that was constructed using grant funds.•We pay cash incentives to ACS when wireless handsets are sold to their retail wireless customers and this incentive is recordedas an offset to revenue, and•Other revenues are recognized when the service is provided.As an Eligible Telecommunications Carrier ("ETC"), we receive support from the Universal Service Fund ("USF") to support the provisionof wireline local access and wireless service in high cost areas. In November 2011, the FCC published a final rule that segregated thesupport methodology for Remote and Urban areas in Alaska.Remote High Cost SupportRemote high cost support is based upon the 2011 support disbursed to Competitive Eligible Telecommunications Carriers (“CETCs”)(“Statewide Support Cap”) providing supported services in Remote Alaska, except AT&T. On January 1, 2012, the per-line rates paid in theRemote areas were frozen by the USF and cannot exceed $250 per line per month on a study area basis. Line count growth that causes98Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements support to exceed the Statewide Support Cap triggers a pro rata support payment reduction to all subject Alaska CETCs until the supportis reduced to the Statewide Support Cap amount.We accrue estimated program revenue based on current line counts and the frozen per-line rates, reduced as needed by our estimate ofthe impact of the Statewide Support Cap. When determining the estimated program revenue accrual, we also consider our assessment ofthe impact of current FCC regulations and of the potential outcome of FCC proceedings. Our estimated accrued revenue is subject to ourjudgment regarding the outcome of many variables and is subject to upward or downward adjustment in subsequent periods.Additionally, the FCC determined that Remote support will continue to be based on line counts (subject to the Statewide Support Cap) untilthe last full month prior to the implementation of a successor funding mechanism. A further rulemaking to consider successor fundingmechanisms is underway.Urban High Cost SupportUrban high cost support payments are frozen at the monthly average of the subject CETC’s 2011 annual support and are not dependentupon line counts. A 20% annual phase down commenced July 1, 2012.The phase down has been capped at 60% and the subject CETCs will continue to receive annual support payments at the 60% level untila successor funding mechanism is implemented. A further rulemaking to consider successor funding mechanisms is underway and once anew funding mechanism is in place the phase down will restart the annual 20% decrease until no support is paid.We apply the proportional performance revenue recognition method to account for the impact of the declining payments while our level ofservice provided and associated costs remain constant. Included in the calculation are the scheduled Urban high cost support paymentsfrom October 2011 through July 2017 net of our Urban accounts receivable balance at September 30, 2011. An equal amount of this resultis recognized as Urban support revenue each period.For both Remote and Urban high cost support revenue, our ability to collect our accrued USF support is contingent upon continuation ofthe USF program and upon our eligibility to participate in that program, which are subject to change by future regulatory, legislative orjudicial actions. We adjust revenue and the account receivable in the period the FCC makes a program change or we assess the likelihoodthat such a change has increased or decreased revenue. We do not recognize revenue related to a particular service area until our ETCstatus has been approved by the RCA.We recorded high cost support revenue under the USF program of $66.7 million, $55.6 million and 42.8 million for the years endedDecember 31, 2014, 2013 and 2012, respectively. At December 31, 2014, we have $47.0 million in high cost accounts receivable.(v)Advertising ExpenseWe expense advertising costs in the period during which the first advertisement appears. Advertising expenses were $5.7 million, $5.2million and $4.9 million for the years ended December 31, 2014, 2013 and 2012, respectively.(w)LeasesScheduled operating lease rent increases are amortized over the expected lease term on a straight-line basis. Rent holidays arerecognized on a straight-line basis over the operating lease term (including any rent holiday period).Leasehold improvements are amortized over the shorter of their economic lives or the lease term. We may amortize a leaseholdimprovement over a term that includes assumption of a lease renewal if the renewal is reasonably assured. Leasehold improvementsacquired in a business combination are amortized over the shorter of the useful life of the assets or a term that includes required leaseperiods and renewals that are deemed to be reasonably assured at the date of acquisition. Leasehold improvements that are placed inservice significantly after and are not contemplated at or near the beginning of the lease term are amortized over the shorter of the usefullife of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date theleasehold improvements are purchased.99Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Leasehold improvements made by us and funded by landlord incentives or allowances under an operating lease are recorded as deferredrent and amortized as reductions to lease expense over the lease term.(x)Interest ExpenseMaterial interest costs incurred during the construction period of non-software capital projects are capitalized. Interest costs incurredduring the development period of a software capital project are capitalized. Interest is capitalized in the period commencing with the firstexpenditure for a qualifying capital project and ending when the capital project is substantially complete and ready for its intended use. Wecapitalized interest costs of $3.6 million, $4.6 million and $2.8 million during the years ended December 31, 2014, 2013 and 2012,respectively.(y)Income TaxesIncome taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for their future taxconsequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and theirrespective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable earnings in theyears in which those temporary differences are expected to be recovered or settled. A valuation allowance is recognized if it is more likelythan not that some portion or the entire deferred tax asset will not be realized.(z)Comprehensive IncomeTotal comprehensive income was equal to net income during the years ended December 31, 2014, 2013 and 2012.(aa)Share-based Payment ArrangementsCompensation expense is recognized in the financial statements for share-based awards based on the grant date fair value of thoseawards. Share-based compensation expense includes an estimate for pre-vesting forfeitures and is recognized over the requisite serviceperiods of the awards on a straight-line basis, which is generally commensurate with the vesting term.We are required to report the benefits associated with tax deductions in excess of recognized compensation cost as a financing cash flowrather than as an operating cash flow.(ab)Use of EstimatesThe preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. Significant items subject to estimates and assumptions include theallowance for doubtful receivables, unbilled revenues, accrual of the USF high cost Remote area program support, share-basedcompensation, inventory at lower of cost or market, reserve for future customer credits, liability for incurred but not reported medicalinsurance claims, valuation allowances for deferred income tax assets, depreciable and amortizable lives of assets, the carrying value oflong-lived assets including goodwill, cable certificates, wireless and broadcast licenses, our effective tax rate, purchase price allocations,deferred lease expense, asset retirement obligations, the accrual of Cost of Goods Sold, depreciation and the accrual of contingencies andlitigation. Actual results could differ from those estimates.The accounting estimates related to revenues from the USF high cost Remote area program are dependent on various inputs including ourestimate of the Statewide Support Cap, our assessment of the impact of new FCC regulations, and the potential outcome of FCCproceedings. These inputs are subjective and based on our judgment regarding the outcome of certain variables and are subject toupward or downward adjustment in subsequent periods.(ac)Concentrations of Credit RiskFinancial instruments that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents and accountsreceivable. Excess cash is invested in high quality short-term liquid money instruments. December 31, 2014, and 2013, substantially all ofour cash and cash equivalents were invested in short-term liquid money instruments and the balances were in excess of Federal DepositInsurance Corporation insured limits.100Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements We have one major customer for the year ended December 31, 2014, see Note 10, “Industry Segment Data” of this Form 10-K. Ourremaining customers are located primarily throughout Alaska. Because of this geographic concentration, our growth and operations dependupon economic conditions in Alaska.(ad)Software Capitalization PolicyInternally used software, whether purchased or developed, is capitalized and amortized using the straight-line method over an estimateduseful life of five years. We capitalize certain costs associated with internally developed software such as payroll costs of employeesdevoting time to the projects and external direct costs for materials and services. Costs associated with internally developed software tobe used internally are expensed until the point the project has reached the development stage. Subsequent additions, modifications orupgrades to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did notperform. Software maintenance and training costs are expensed in the period in which they are incurred. The capitalization of softwarerequires judgment in determining when a project has reached the development stage.(ae)GuaranteesCertain of our customers have guaranteed levels of service. If an interruption in service occurs we do not recognize revenue for anyportion of the monthly service fee that will be refunded to the customer or not billed to the customer due to these service levelagreements.Additionally, we have provided certain guarantees to U.S. Bancorp Community Development Corporation (“US Bancorp”), our tax creditinvestor in our four VIEs. We have guaranteed the delivery of $56.0 million of New Markets Tax Credits (“NMTC”) to US Bancorp, as wellas certain loan and management fee payments between our subsidiaries and the VIEs, for which we are the primary beneficiary. In theevent that the tax credits are not delivered or certain payments not made, we are obligated to provide prompt and complete payment ofthese obligations. Please refer to Note 12, Variable Interest Entities, of this Form 10-K, for more information about our NMTCtransactions.(af)Classification of Taxes Collected from CustomersWe report sales, use, excise, and value added taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between us and a customer on a net basis in our Consolidated Income Statements. The following are certainsurcharges reported on a gross basis in our Consolidated Income Statements (amounts in thousands): Years Ended December 31, 2014 2013 2012Surcharges reported gross$4,252 4,644 5,401(ag)ReclassificationsReclassifications have been made to the prior years' consolidated financial states to conform to classifications used in the current year.101Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (2)Consolidated Statements of Cash Flows Supplemental DisclosuresChanges in operating assets and liabilities consist of (amounts in thousands):Year ended December 31,2014 2013 2012(Increase) decrease in accounts receivable, net$15,357 (68,360) (9,386)(Increase) decrease in prepaid expenses(4,454) 672 (350)(Increase) decrease in inventories(6,631) 1,751 (4,576)Decrease in other current assets88 1,448 1,953(Increase) decrease in other assets(878) (1,459) 1,236Increase (decrease) in accounts payable(4,648) 15,334 3,085Increase in deferred revenues1,728 2,368 3,215Increase (decrease) in accrued payroll and payroll related obligations2,997 10,263 (2,750)Increase (decrease) in accrued liabilities(242) (883) 3,043Increase (decrease) in accrued interest(434) 302 106Increase (decrease) in subscriber deposits(114) (40) 116Decrease in long-term deferred revenue(4,163) (3,554) (5,001)Increase (decrease) in components of other long-term liabilities1,714 (20) (1,301)Total change in operating assets and liabilities$320 (42,178) (10,610)The following items are for the years ended December 31, 2014, 2013 and 2012 (amounts in thousands):Net cash paid or received:2014 2013 2012Interest paid, net of amounts capitalized$74,618 71,749 69,083The following items are non-cash investing and financing activities for the years ended December 31, 2014, 2013 and 2012 (amounts inthousands): 2014 2013 2012Non-cash additions for purchases of property and equipment$42,958 17,230 9,010Capital lease obligation incurred$9,386 — —Asset retirement obligation additions to property and equipment$4,268 5,292 660Accrued distribution to non-controlling interest$4,167 4,167 —Deferred compensation distribution denominated in shares$617 621 511Net assets acquired with equity in AWN (see Note 1(d))$— 267,642 —(3)Receivables and Allowance for Doubtful ReceivablesReceivables consist of the following at December 31, 2014 and 2013 (amounts in thousands): 2014 2013Trade$209,811 225,689Employee801 1,037Other1,829 1,646Total receivables$212,441 228,372As described in Note 1(u), Revenue Recognition, we receive support from each of the various USF programs: high cost, low income, ruralhealth care, and schools and libraries. This support was 19%, 18%, and 18% of our revenue for the years ended December 31, 2014, 2013and 2012, respectively. We had USF net receivables of $109.6 million and $124.3 million at December 31, 2014 and 2013, respectively.102Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Changes in the allowance for doubtful receivables during the years ended December 31, 2014, 2013 and 2012 are summarized below (amountsin thousands): Additions Deductions DescriptionBalance atbeginning of year Charged to costsand expenses Charged to otheraccounts Write-offs net ofrecoveries Balance at end ofyearDecember 31, 2014$2,346 3,994 — 1,798 4,542December 31, 2013$3,215 2,370 (446) 2,793 2,346December 31, 2012$5,796 3,649 (2,261) 3,969 3,215In 2012 we received notice that a 2010 appeal of a decision impacting our Rural Health Care Division support was successful and receivedpayment of $1.6 million. The original reserve was recorded by reducing revenue therefore we recognized revenue and reduced our allowanceupon winning the appeal and this amount is included in Additions - Charged to other accounts, during the year ended December 31, 2012.(4)Net Property and Equipment in ServiceNet property and equipment in service consists of the following at December 31, 2014 and 2013 (amounts in thousands): 2014 2013Land and buildings$100,038 69,984Telephony transmission equipment and distribution facilities1,189,470 1,085,963Cable transmission equipment and distribution facilities193,832 177,410Studio equipment14,396 12,680Support equipment and systems270,629 245,301Transportation equipment15,667 13,619Customer premise equipment153,039 149,372Fiber optic cable systems305,200 299,525 2,242,271 2,053,854Less accumulated depreciation1,178,982 1,042,724Less accumulated amortization50,047 41,552Net property and equipment in service$1,013,242 969,578 Property and equipment under capital leases$112,495 104,251(5)Intangible Assets and GoodwillAs of October 31, 2014, cable certificates, wireless licenses, broadcast licenses and goodwill were tested for impairment and the fair valueswere greater than the carrying amounts, therefore these intangible assets were determined not to be impaired at December 31, 2014. Theremaining useful lives of our cable certificates, wireless licenses, broadcast licenses and goodwill were evaluated as of October 31, 2014, andevents and circumstances continue to support an indefinite useful life. There are no indicators of impairment of our intangible assets subjectto amortization as of December 31, 2014.103Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Other Intangible Assets subject to amortization include the following at December 31, 2014 and 2013 (amounts in thousands): 2014 2013Software license fees$52,683 41,804Rights to use48,283 55,407Customer relationships3,226 3,036Right-of-way783 783 104,975 101,030Less accumulated amortization38,960 29,595Net other intangible assets$66,015 71,435Under the terms of the Wireless Agreement, we acquired from ACS rights to use capacity on its network and the associated maintenance onthis network capacity for 20 years.Changes in Goodwill and Other Intangible Assets are as follows (amounts in thousands): GoodwillOther IntangibleAssetsBalance at December 31, 2012$77,29416,560Goodwill addition from AWN acquisition - Wireless Segment140,080—Goodwill addition from Denali Media acquisitions - Wireline Segment1,667—Asset additions—61,919Less amortization expense—7,044Balance at December 31, 2013219,04171,435AWN purchase price adjustment - Wireless Segment8,866(7,298)Goodwill addition from acquisitions - Wireline Segment1,653—Asset additions—11,593Less amortization expense—9,715Balance at December 31, 2014$229,56066,015Amortization expense for amortizable intangible assets for the years ended December 31, 2014, 2013 and 2012 follow (amounts in thousands): Years Ended December 31, 2014 2013 2012Amortization expense$9,715 7,044 5,227Amortized intangible assets are definite-life assets, and as such, we record amortization expense based on a method that most appropriatelyreflects our expected cash flows from these assets. Intangible assets that have finite useful lives are amortized over their useful lives usingthe straight-line method with a weighted-average life of 15.3 years.104Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Amortization expense for amortizable intangible assets for each of the five succeeding fiscal years is estimated to be (amounts in thousands):Years Ending December 31, 2015$9,2612016$7,4682017$5,2272018$3,7302019$2,890(6)Long-Term DebtLong-term debt consists of the following at December 31, 2014 and 2013 (amounts in thousands): 2014 20132021 Notes (a)$325,000 325,0002019 Notes (b)425,000 425,000Senior Credit Facility (c)279,000 261,000Wells Fargo note payable (d)9,767 —Rural Utilities Service ("RUS") debt (e)29 39,425Debt1,038,796 1,050,425Less unamortized discount paid on the 2019 Notes2,118 2,445Less current portion of long-term debt622 2,836Long-term debt, net$1,036,056 1,045,144(a)We pay interest of 6.75% on notes that are due in 2021 ("2021 Notes"). The 2021 Notes are senior unsecured obligations which rankequally in right of payment with our existing and future senior unsecured debt, including our 2019 Notes, and senior in right of payment toall future subordinated indebtedness.The 2021 Notes are not redeemable prior to June 1, 2016. At any time on or after June 1, 2016, the 2021 Notes are redeemable at ouroption, in whole or in part, on not less than thirty nor more than sixty days’ notice, at the following redemption prices (expressed aspercentages of principal amount), plus accrued and unpaid interest (if any) to the date of redemption:If redeemed during the twelve month period commencing June 1 of the year indicated:Redemption Price2016103.375%2017102.250%2018101.125%2019 and thereafter100.000%The 2021 Notes mature on June 1, 2021. Semi-annual interest payments are payable on June 1 and December 1.The 2021 Notes were issued pursuant to an Indenture, dated as of May 20, 2011, between us and Union Bank, N.A., as trustee.We are not required to make mandatory sinking fund payments with respect to the 2021 Notes.Upon the occurrence of a change of control, each holder of the 2021 Notes will have the right to require us to purchase all or any part(equal to $1,000 or an integral multiple thereof, except that no 2021 Note will be purchased in part if the remaining portion thereof would notbe at least $2,000) of such holder’s 2021 Notes at a purchase price equal to 101% of the principal amount of such 2021 Notes, plusaccrued and unpaid105Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements interest on such 2021 Notes, if any. If we or certain of our subsidiaries engage in asset sales, we must generally either invest the netcash proceeds from such sales in our business within a period of time, prepay debt under any outstanding credit facility, or make an offerto purchase a principal amount of the 2021 Notes equal to the excess net cash proceeds, with the purchase price equal to 100% of theirprincipal amount, plus accrued and unpaid interest, if any.The terms of the Indenture include customary affirmative and negative covenants and customary events of default. At any time after theoccurrence and during the continuation of an event of default under the Indenture, the trustee or holders of not less than 25% in aggregateprincipal amount of the 2021 Notes may, among other options, declare the 2021 Notes immediately due and payable.We paid closing costs totaling $3.6 million in connection with the offering, which were recorded as deferred loan costs and are beingamortized over the term of the 2021 Notes.We were in compliance with all 2021 Notes loan covenants at December 31, 2014.(b)We pay interest of 8.63% on notes that are due in 2019 (“2019 Notes”). The 2019 Notes are senior unsecured obligations which rankequally in right of payment with the existing and future senior unsecured debt, including our 2021 Notes described previously, and senior inright of payment to all future subordinated indebtedness. The 2019 Notes are carried on our Consolidated Balance Sheets net of theunamortized portion of the discount, which is being amortized to Interest Expense over the term of the 2019 Notes using the effectiveinterest method and an effective interest rate of 9.09%.The 2019 Notes are redeemable at our option, in whole or in part, on not less than thirty days nor more than sixty days notice, at thefollowing redemption prices (expressed as percentages of principle amount), plus accrued and unpaid interest (if any) to the date ofredemption:If redeemed during the twelve month period commencing November 15 of the year indicated:Redemption Price2014104.313%2015103.000%2016101.438%2017 and thereafter100.000%The 2019 Notes mature on November 15, 2019. Semi-annual interest payments are payable on May 15 and November 15 of each year.The 2019 Notes were issued pursuant to an Indenture, dated as of November 3, 2009, between us and Union Bank, N.A., as trustee.We are not required to make mandatory sinking fund payments with respect to the 2019 Notes.Upon the occurrence of a change of control, each holder of the 2019 Notes will have the right to require us to purchase all or any part(equal to $1,000 or an integral multiple thereof, except that no 2019 Note will be purchased in part if the remaining portion thereof would notbe at least $2,000) of such holder’s 2019 Notes at a purchase price equal to 101% of the principal amount of such 2019 Notes, plusaccrued and unpaid interest on such 2019 Notes, if any. If we or certain of our subsidiaries engage in asset sales, we must generallyeither invest the net cash proceeds from such sales in our business within a period of time, prepay debt under any outstanding creditfacility, or make an offer to purchase a principal amount of the 2019 Notes equal to the excess net cash proceeds, with the purchase priceequal to 100% of their principal amount, plus accrued and unpaid interest, if any.The terms of the Indenture include customary affirmative and negative covenants and customary events of default. At any time after theoccurrence and during the continuation of an event of default under the Indenture, the trustee or holders of not less than 25% in aggregateprincipal amount of the 2019 Notes may, among other options, declare the 2019 Notes immediately due and payable.106Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements We paid closing costs totaling $9.4 million in connection with the offering, which were recorded as deferred loan costs and are beingamortized over the term of the 2019 Notes.We were in compliance with all 2019 Notes loan covenants at December 31, 2014.(c)GCI Holdings, Inc. ("GCI Holdings"), a wholly owned subsidiary of GCI, has a credit facility with Credit Agricole Corporate and InvestmentBank, as administrative agent ("Senior Credit Facility"). The Senior Credit Facility provides up to $240.0 million in delayed draw term loansand a $150.0 million revolving credit facility.The interest rate on our Senior Credit Facility is London Interbank Offered Rate (“LIBOR”) plus the following Applicable Margin set forthopposite each applicable Total Leverage Ratio below.Total Leverage Ratio (as defined)Applicable Margin>=5.53.00%>=5.0 but <5.52.75%>=4.5 but <5.02.50%>=4.0 but <4.52.25%<4.02.00%Borrowings under the Senior Credit Facility are subject to certain financial covenants and restrictions on indebtedness. Our Senior CreditFacility Total Leverage Ratio (as defined) may not exceed 5.95 to one; the Senior Leverage Ratio (as defined) may not exceed 3.00 toone; and our Interest Coverage Ratio (as defined) must not be less than 2.50 to one at any time.The terms of the Senior Credit Facility include customary representations and warranties, customary affirmative and negative covenantsand customary events of default. At any time after the occurrence of an event of default under the Senior Credit Facility, the lenders may,among other options, declare any amounts outstanding under the Senior Credit Facility immediately due and payable and terminate anycommitment to make further loans under the Senior Credit Facility. The obligations under the Senior Credit Facility are secured by asecurity interest on substantially all of the assets of GCI Holdings, Inc. and the subsidiary guarantors, as defined in the Senior CreditFacility, and on the stock of GCI Holdings, Inc.On April 30, 2013, we modified our then existing Senior Credit Facility resulting in a $0.1 million write-off of previously deferred loan feeson our Consolidated Income Statement for the year ended December 31, 2013. Net deferred loan fees of $0.7 million associated with theportion of our previous Senior Credit Facility that was determined not to have been substantially modified are being amortized over the lifeof the Senior Credit Facility.In connection with the current Senior Credit Facility, we paid loan fees and other expenses of $0.4 million that were expensed immediatelyon our Consolidated Income Statement for the year ended December 31, 2013 and $3.0 million that were deferred and are being amortizedover the life of the Senior Credit Facility.We have borrowed $240.0 million under the delayed draw term loan, $39.0 million under the revolving portion and have $22.5 million ofletters of credit outstanding under the Senior Credit Facility at December 31, 2014, which leaves $88.5 million available for borrowing as ofDecember 31, 2014.(d)GCI Holdings, entered into a $10.0 million loan agreement with Wells Fargo Bank on June 30, 2014 to finance the purchase of abuilding. The note matures on July 15, 2029 and is due in monthly installments of principal and interest. The interest rate is variable atone month LIBOR plus 2.25%.The note is subject to similar affirmative and negative covenants as our Senior Credit Facility. The obligations under the note are securedby a security interest and lien on the purchased building. In connection with the note issuance, we paid loan fees of $0.1 million that weredeferred and are being amortized over the life of the note.107Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (e)UUI, our wholly owned subsidiary, has entered into various loans with the RUS. The long-term debt was due in monthly installments ofprincipal based on a fixed rate amortization schedule. The interest rates on the various loans to which this debt relates ranged from 2.4%to 4.5%. Substantially all of the assets of UUI were pledged as collateral for the amounts due to RUS. We repaid substantially allamounts owed to the RUS in 2014. Maturities of long-term debt as of December 31, 2014 are as follows (amounts in thousands):Years ending December 31, 2015$622201660420176192018279,6352019425,6512020 and thereafter331,665Total debt1,038,796Less unamortized discount paid on 2019 Notes2,118Less current portion of long-term debt622Long-term debt, net$1,036,056(7)Income TaxesTotal income tax expense of $10.0 million, $11.0 million and $12.1 million for the years ended December 31, 2014, 2013 and 2012,respectively, was allocated to income in each year. Income tax expense consists of the following (amounts in thousands): Years Ended December 31, 2014 2013 2012Deferred tax expense: Federal taxes$9,081 9,267 10,318State taxes948 1,690 1,770 $10,029 10,957 12,088Total income tax expense differed from the “expected” income tax expense determined by applying the statutory federal income tax rate of35% as follows (amounts in thousands): Years Ended December 31, 2014 2013 2012“Expected” statutory tax expense$24,246 14,939 7,437Impact of non-controlling interest attributable to non-tax paying entity(18,255) (7,977) —State income taxes, net of federal expense948 1,690 1,770Income tax effect of nondeductible entertainment expenses1,125 1,045 777Income tax effect of nondeductible lobbying expenses425 369 298Income tax effect of nondeductible officer compensation1,351 824 1,718Other, net189 67 88 $10,029 10,957 12,088108Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2014 and2013 are summarized below (amounts in thousands): 2014 2013Current deferred tax assets, net of current deferred tax liability: Net operating loss carryforwards$44,250 30,344Compensated absences, accrued for financial reporting purposes3,117 2,956Workers compensation and self-insurance health reserves, principally due to accrual for financial reportingpurposes2,043 1,688Accounts receivable, principally due to allowance for doubtful receivables2,585 1,154Deferred revenue for financial reporting purposes2,525 2,673Other1,600 938Total current deferred tax assets$56,120 39,753Long-term deferred tax assets: Net operating loss carryforwards$87,688 90,589Deferred revenue for financial reporting purposes33,552 35,506Alternative minimum tax credits1,735 1,895Deferred compensation expense for tax purposes in excess of amounts recognized for financial reportingpurposes1,374 2,556Asset retirement obligations in excess of amounts recognized for tax purposes6,660 4,930Share-based compensation expense for financial reporting purposes in excess of amounts recognized fortax purposes1,458 1,860Other4,266 4,335Total long-term deferred tax assets136,733 141,671Long-term deferred tax liabilities: Plant and equipment, principally due to differences in depreciation231,109 212,719Intangible assets48,768 49,761Flow-through entity deferred tax items44,728 40,667Total long-term deferred tax liabilities324,605 303,147Net long-term deferred tax liabilities$187,872 161,476At December 31, 2014, we have tax net operating loss carryforwards of $320.3 million that will begin expiring in 2020 if not utilized, andalternative minimum tax credit carryforwards of $1.7 million available to offset regular income taxes payable in future years. Our utilization ofremaining acquired net operating loss carryforwards is subject to annual limitations pursuant to Internal Revenue Code section 382 which couldreduce or defer the utilization of these losses.109Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Our tax net operating loss carryforwards are summarized below by year of expiration (amounts in thousands):Years ending December 31,Federal State2020$34,958 34,301202129,614 28,987202214,081 13,78820233,968 3,9032024722 —2025737 —2026150 —20271,010 —202839,879 39,715202948,370 47,5582031110,933 109,37620335,031 4,927203430,797 29,946Total tax net operating loss carryforwards$320,250 312,501Tax benefits associated with recorded deferred tax assets are considered to be more likely than not realizable through taxable income earnedin carryback years, future reversals of existing taxable temporary differences, and future taxable income exclusive of reversing temporarydifferences and carryforwards. The amount of deferred tax assets considered realizable, however, could be reduced if estimates of futuretaxable income during the carryforward period are reduced.We file federal income tax returns in the U.S. and in various state jurisdictions. We are not subject to U.S. or state tax examinations by taxauthorities for years 2010 and earlier except that certain U.S. federal income tax returns for years after 1998 are not closed by relevantstatutes of limitations due to unused net operating losses reported on those income tax returns.We recognize accrued interest on unrecognized tax benefits in interest expense and penalties in selling, general and administrativeexpenses. We did not have any unrecognized tax benefits as of December 31, 2014, 2013 and 2012, and accordingly, we did not recognizeany interest expense. Additionally, we recorded no penalties during the years ended December 31, 2014, 2013 and 2012.We did not record any excess tax benefit generated from stock options exercised during the years ended December 31, 2014, 2013 and 2012,since we are in a net operating loss carryforward position and the income tax deduction will not yet reduce income taxes payable. Thecumulative excess tax benefits generated for stock options exercised that have not been recognized is $3.5 million at December 31, 2014.110Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (8)Financial InstrumentsFair Value of Financial InstrumentsThe fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willingparties. At December 31, 2014 and 2013, the fair values of cash and cash equivalents, net receivables, inventories, accounts payable,accrued payroll and payroll related obligations, accrued interest, accrued liabilities, and subscriber deposits approximate their carrying valuedue to the short-term nature of these financial instruments. The carrying amounts and approximate fair values of our financial instruments atDecember 31, 2014 and 2013 follow (amounts in thousands): December 31, 2014 December 31, 2013 Carrying Amount Fair Value Carrying Amount Fair ValueCurrent and long-term debt$1,036,678 1,055,952 1,047,980 1,058,431The following methods and assumptions were used to estimate fair values:Current and long-term debt: The fair values of the 2021 Notes and the 2019 Notes are based upon quoted market prices for the same orsimilar issues (Level 2). The fair value of our RUS debt is based on the current rates offered to us for the same remaining maturities (Level 3).The fair value of our Senior Credit Facility and Wells Fargo note payable are estimated to approximate their carrying value because theinstruments are subject to variable interest rates (Level 2).Fair Value MeasurementsAssets measured at fair value on a recurring basis as of December 31, 2014 and 2013 are as follows (amounts in thousands): Fair Value Measurement at Reporting Date UsingDecember 31, 2014 AssetsQuoted Prices in ActiveMarkets for IdenticalAssets (Level 1) Significant OtherObservable Inputs(Level 2) SignificantUnobservable Inputs(Level 3)Deferred compensation plan assets (mutual funds)$2,068 — —Total assets at fair value$2,068 — — December 31, 2013 Assets Deferred compensation plan assets (mutual funds)$2,183 — —Total assets at fair value$2,183 — —The valuation of our mutual funds is determined using quoted market prices in active markets utilizing market observable inputs.(9)Stockholders’ EquityCommon StockGCI’s Class A and Class B common stock are identical in all respects, except that each share of Class A common stock has one vote pershare and each share of Class B common stock has ten votes per share. Each share of Class B common stock outstanding is convertible, atthe option of the holder, into one share of Class A common stock.During the years ended December 31, 2014, 2013 and 2012, we repurchased 0.4 million, 1.8 million and 1.5 million shares, respectively, of ourClass A common stock at a cost of $4.2 million, $15.6 million and $14.0 million, respectively, pursuant to the Class A and Class B commonstock repurchase program authorized by111Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements GCI’s Board of Directors. During the years ended December 31, 2014, 2013 and 2012, we retired 0.6 million, 2.0 million and 1.8 millionshares, respectively, of our Class A common stock.Shared-Based CompensationOur Amended and Restated 1986 Stock Option Plan ("Stock Option Plan"), provides for the grant of options and restricted stock awards(collectively "award") for a maximum of 15.7 million shares of GCI Class A common stock, subject to adjustment upon the occurrence ofstock dividends, stock splits, mergers, consolidations or certain other changes in corporate structure or capitalization. If an award expires orterminates, the shares subject to the award will be available for further grants of awards under the Stock Option Plan. The CompensationCommittee of GCI’s Board of Directors administers the Stock Option Plan. Substantially all restricted stock awards granted vest over periodsof up to three years. Substantially all options vest in equal installments over a period of five years and expire ten years from the date of grant.The requisite service period of our awards is generally the same as the vesting period. Options granted pursuant to the Stock Option Plan areonly exercisable if at the time of exercise the option holder is our employee, non-employee director, or a consultant or advisor working on ourbehalf. New shares are issued when stock option agreements are exercised or restricted stock awards are granted. We have 2.4 millionshares available for grant under the Stock Option Plan at December 31, 2014.The fair value of restricted stock awards is determined based on the number of shares granted and the quoted price of our common stock. Weestimate pre-vesting option forfeitures at the time of grant and periodically revise those estimates in subsequent periods if actual forfeituresdiffer from those estimates. We record share-based compensation expense only for those awards expected to vest using an estimatedforfeiture rate based on our historical pre-vesting forfeiture data. We review our forfeiture estimates annually and adjust our share-basedcompensation expense in the period our estimate changes.A summary of option activity under the Stock Option Plan as of December 31, 2014 and changes during the year then ended is presentedbelow: Shares (inthousands) Weighted AverageExercise Price Weighted Average RemainingContractual Term Aggregate IntrinsicValue (inthousands)Outstanding at January 1, 2014620 $7.74 Exercised(50) $9.09 Forfeited(250) $8.40 Expired(12) $10.69 Outstanding at December 31, 2014308 $6.86 4.1 years $2,125Exercisable at December 31, 2014305 $6.88 4.1 years $2,097The total fair value of options vesting during the years ended December 31, 2014, 2013 and 2012, was $50,000, $78,000 and $560,000,respectively. The total intrinsic values, determined as of the date of exercise, of options exercised in the years ended December 31, 2014,2013 and 2012, were $0.1 million, $0.2 million and $1.3 million, respectively. We received $0.5 million, $0.6 million and $2.1 million incash from stock option exercises in the years ended December 31, 2014, 2013 and 2012, respectively.A summary of nonvested restricted stock award activity under the Stock Option Plan for the year ended December 31, 2014, follows (shareamounts in thousands):112Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Shares WeightedAverageGrant DateFair ValueNonvested at January 1, 20141,209 $8.60Granted1,267 $10.04Vested(711) $9.89Forfeited(21) $9.05Nonvested at December 31, 20141,744 $9.11The weighted average grant date fair value of awards granted during the years ended December 31, 2014, 2013 and 2012, were $10.04, $8.30and $9.23, respectively. We have recorded share-based compensation expense of $8.4 million, $6.6 million and $5.0 million for the yearsended December 31, 2014, 2013 and 2012, respectively. Share-based compensation expense is classified as Selling, General andAdministrative Expense in our Consolidated Income Statements. Unrecognized share-based compensation expense was $9.6 million relatingto 1.7 million restricted stock awards. We expect to recognize share-based compensation expense over a weighted average period of 0.1years for stock options and 2.1 years for restricted stock awards.GCI 401(k) PlanIn 1986, we adopted an Employee Stock Purchase Plan (“GCI 401(k) Plan”) qualified under Section 401 of the Internal Revenue Code of 1986.The GCI 401(k) Plan provides for acquisition of GCI’s Class A common stock at market value as well as various mutual funds. We may matcha percentage of the employees' contributions up to certain limits, decided by GCI’s Board of Directors each year. Our matching contributionsallocated to participant accounts totaled $9.1 million, $8.2 million and $7.5 million for the years ended December 31, 2014, 2013 and 2012,respectively. We used cash to fund all of our employer-matching contributions during the years ended December 31, 2014, 2013 and 2012.(10)Industry Segments DataWe have two reportable segments, Wireless and Wireline. The Wireless segment’s revenue is derived from wholesale wireless services. TheWireline segment’s revenue includes all of our other revenue, specifically a full range of retail wireless, data, video and voice services toresidential customers, businesses, governmental entities and educational institutions; wholesale data and voice services to common carriercustomers; Internet, data network and managed services to rural schools and health organizations and regulated voice services to residentialand commercial customers in rural communities primarily in Southwest Alaska. Wireless plan fee and usage revenues from external customers are allocated between our Wireless and Wireline segments. The Wirelesssegment recorded subsidies to the Wireline segment related to wireless equipment sales based upon equipment sales and agreed-uponsubsidy rates through the AWN transaction close on July 23, 2013. Subsequent to the transaction close and through March 31, 2014, althoughpermitted, the Wireline segment was unable to meet the requirements in order to request a wireless equipment subsidy from the Wirelesssegment in accordance with the AWN agreements. These subsidies, which eliminate in consolidation, increase the Wireline segment earningsbefore depreciation and amortization expense, net interest expense, income taxes, share-based compensation expense, accretion expense,income or loss attributable to non-controlling interest and non-cash contribution adjustment (“Adjusted EBITDA”) and reduce the Wirelesssegment Adjusted EBITDA. The wireless equipment subsidy recorded by the Wireless segment was $17.3 million, $12.2 million, and $23.2million for the years ended December 31, 2014, 2013, and 2012, respectively. Selling, general and administrative expenses are charged to theWireless segment based upon a shared services agreement. The remaining selling, general and administrative expenses are charged to theWireline segment. Intercompany transactions have been pushed down to the segment level.We evaluate performance and allocate resources based on Adjusted EBITDA. Management believes that this measure is useful to investorsand other users of our financial information in evaluating operating profitability as an analytical indicator of income generated to service debtand fund capital expenditures. In addition, multiples of current or projected earnings before depreciation and amortization, net interestexpense, and income taxes113Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (“EBITDA”) are used to estimate current or prospective enterprise value. The accounting policies of the reportable segments are the same asthose described in Note 1, “Business and Summary of Significant Accounting Policies” of this Form 10-K. We have no intersegment sales.We earn all revenues through sales of services and products within the United States. All of our long-lived assets are located within the UnitedStates of America, except approximately 82% of our undersea fiber optic cable systems which transit international waters and all of oursatellite transponders.Summarized financial information for our reportable segments for the years ended December 31, 2014, 2013 and 2012 follows (amounts inthousands): Wireless Wireline Total ReportableSegments2014 Revenues Wholesale$269,977 — 269,977Consumer— 288,014 288,014Business Services— 225,963 225,963Managed Broadband— 126,244 126,244Total269,977 640,221 910,198 Cost of Goods Sold90,920 211,784 302,704Contribution179,057 428,437 607,494Less SG&A21,631 272,016 293,647Plus share-based compensation expense— 8,392 8,392Plus accretion expense733 516 1,249Other— (372) (372)Adjusted EBITDA$158,159 164,957 323,116 Capital expenditures$30,243 145,866 176,109Goodwill$164,312 65,248 229,560Total assets$625,417 1,433,081 2,058,498114Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Wireless Wireline Total ReportableSegments2013 Revenues Wholesale$197,218 — 197,218Consumer— 274,805 274,805Business Services— 222,814 222,814Managed Broadband— 116,811 116,811Total197,218 614,430 811,648 Cost of Good Sold68,086 212,376 280,462Contribution129,132 402,054 531,186Less SG&A20,030 251,035 271,065Plus share-based compensation expense— 6,638 6,638Plus accretion expense507 (430) 77Other expense— 447 447Adjusted EBITDA$109,609 157,674 267,283 Capital expenditures$28,156 152,398 180,554Goodwill$155,445 63,596 219,041Total assets$624,740 1,387,067 2,011,807 2012 Revenues Wholesale$124,745 — 124,745Consumer— 269,357 269,357Business Services— 207,892 207,892Managed Broadband— 108,187 108,187Total124,745 585,436 710,181 Cost of Good Sold58,737 188,764 247,501Contribution66,008 396,672 462,680Less SG&A15,475 227,773 243,248Plus share-based compensation expense— 5,040 5,040Plus non-cash contribution expense— 960 960Plus accretion expense269 239 508Other expense— 869 869Adjusted EBITDA$50,802 176,007 226,809Effective January 1, 2013, we refocused our business and determined that we have two reportable segments, Wireless and Wireline. Due toour segment change in 2013, capital expenditures and total assets by segment for 2012 are not reported as it is impracticable to allocate ourhistorical balance sheets.115Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements A reconciliation of reportable segment Adjusted EBITDA to consolidated income before income taxes follows (amounts in thousands):Years Ended December 31,2014 2013 2012Reportable segment Adjusted EBITDA$323,116 267,283 226,809Less depreciation and amortization expense(170,285) (147,259) (130,452)Less share-based compensation expense(8,392) (6,638) (5,040)Less non-cash contribution expense— — (960)Less accretion expense(1,249) (77) (508)Other372 (447) (869)Consolidated operating income143,562 112,862 88,980Less other expense, net(74,289) (70,178) (67,730)Consolidated income before income tax expense$69,273 42,684 21,250We earn revenues included in both the Wireless and Wireline segment from a major customer. We earned revenues from our major customer,net of discounts, of $108.3 million or 12% of total consolidated revenues for the year ended December 31, 2014. We had no major customersfor the years ended December 31, 2013 and 2012.(11)Related Party TransactionsWe entered into a long-term capital lease agreement in 1991 with the wife of GCI’s President and CEO for property occupied by us. Theleased asset was capitalized in 1991 at the owner’s cost of $900,000 and the related obligation was recorded. The lease agreement wasamended in April 2008 and our existing capital lease asset and liability increased by $1.3 million to record the extension of this capitallease. The amended lease terminates on September 30, 2026.In January 2001 we entered into an aircraft operating lease agreement with a company owned by GCI’s President and CEO. The lease wasamended several times, most recently in May 2011. The lease term of the aircraft may be terminated at any time by us upon 12 months’written notice. The monthly lease rate of the aircraft is $132,000. In 2001, we paid a deposit of $1.5 million in connection with the lease. Thedeposit will be repaid to us no later than six months after the agreement terminates.Upon closing of the AWN acquisition on July 22, 2013, ACS became a related party for financial statement reporting purposes. ACS providesus with local service lines and network capacity in locations where we do not have our own facilities. We provide wholesale services to ACSwho uses our network to sell services to its respective retail customers and we receive ACS' high cost support from USF for its wirelesscustomers. Additionally, we paid preferential cash distributions to ACS for its one-third ownership interest in AWN (see Note 1(d) for additionalinformation). For the year ended December 31, 2014 and the period from the AWN acquisition date, July 23, 2013, to December 31, 2013, wepaid ACS $62.9 million and $25.1 million, respectively. For the year ended December 31, 2014 and the period from the AWN acquisition date,July 23, 2013, to December 31, 2013, we received $50.9 million and $23.9 million, respectively, in payments from ACS. At December 31, 2014we have $27.9 million in receivables from ACS and $7.4 million in payables to ACS. We also have long term capacity exchange agreementswith ACS for which no money is exchanged.(12)Variable Interest EntitiesWe have entered into several arrangements under the NMTC program with US Bancorp to help fund a $59.3 million project to extend terrestrialbroadband service for the first time to rural Northwestern Alaska communities via a high capacity hybrid fiber optic and microwavenetwork. When completed, the project, called TERRA-Northwest (“TERRA-NW”), will connect to the TERRA-Southwest (“TERRA-SW”)network and provide a high capacity backbone connection from the served communities to the Internet. The NMTC program was provided forin the Community Renewal Tax Relief Act of 2000 (the “Act”) to induce capital investment in qualified lower income communities. The Actpermits taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of communitydevelopment entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income communityinvestments.116Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements On August 30, 2011, we entered into the first arrangement (“NMTC #1”). In connection with the NMTC #1 transaction we loaned $58.3 millionto TIF, a special purpose entity created to effect the financing arrangement, at 1% interest due August 30, 2041. Simultaneously, US Bancorpinvested $22.4 million in TIF. TIF then contributed US Bancorp’s contribution and the loan proceeds to certain CDEs. The CDEs, in turn,loaned the $76.8 million in funds less payment of placement fees, at interest rates varying from 1% to 3.96%, to Unicom, as partial financingfor TERRA-NW.On October 3, 2012, we entered into the second arrangement (“NMTC #2”). In connection with the NMTC #2 transaction we loaned $37.7million to TIF 2 and TIF 2-USB, special purpose entities created to effect the financing arrangement, at 1% interest due October 2,2042. Simultaneously, US Bancorp invested $17.5 million in TIF 2 and TIF 2-USB. TIF 2 and TIF 2-USB then contributed US Bancorp’scontributions and the loan proceeds to certain CDEs. The CDEs, in turn, loaned the $55.2 million in funds less payment of placement fees, atinterest rates varying from 0.7099% to 0.7693%, to Unicom, as partial financing for TERRA-NW.On December 11, 2012, we entered into the third arrangement (“NMTC #3”). In connection with the NMTC #3 transaction we loaned $8.2million to TIF 3, a special purpose entity created to effect the financing arrangement, at 1% interest due December 10, 2042. Simultaneously,US Bancorp invested $3.8 million in TIF 3. TIF 3 then contributed US Bancorp’s contributions and the loan proceeds to a CDE. The CDE, inturn, loaned the $12.0 million in funds less payment of placement fees, at an interest rate of 1.35%, to Unicom, as partial financing forTERRA-NW.US Bancorp is the sole investor in TIF, TIF 2, TIF 2-USB and TIF 3, and as such, is entitled to substantially all of the benefits derived fromthe NMTCs. All of the loan proceeds to Unicom, net of syndication and arrangement fees, are restricted for use on TERRA-NW. Restrictedcash of $1.1 million and $6.9 million was held by Unicom at December 31, 2014 and 2013, respectively, and is included in our ConsolidatedBalance Sheets. We completed construction of TERRA-NW and placed the final phase into service in late 2014.These transactions include put/call provisions whereby we may be obligated or entitled to repurchase US Bancorp’s interests in TIF, TIF 2,TIF 2-USB and/or TIF 3. We believe that US Bancorp will exercise the put options in August 2018, October 2019 and December 2019, at theend of the compliance periods for NMTC #1, NMTC #2 and NMTC #3, respectively. The NMTCs are subject to 100% recapture for a period ofseven years as provided in the Internal Revenue Code. We are required to be in compliance with various regulations and contractualprovisions that apply to the NMTC arrangements. Non-compliance with applicable requirements could result in projected tax benefits not beingrealized by US Bancorp. We have agreed to indemnify US Bancorp for any loss or recapture of NMTCs until such time as our obligation todeliver tax benefits is relieved. There have been no credit recaptures as of December 31, 2014. The value attributed to the put/calls isnominal.We have determined that TIF, TIF 2, TIF 2-USB and TIF 3 are VIEs. The consolidated financial statements of TIF, TIF 2, TIF 2-USB and TIF3 include the CDEs discussed above. The ongoing activities of the VIEs – collecting and remitting interest and fees and NMTC compliance –were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of theVIEs. Management considered the contractual arrangements that obligate us to deliver tax benefits and provide various other guarantees toUS Bancorp; US Bancorp’s lack of a material interest in the underlying economics of the project; and the fact that we are obligated to absorblosses of the VIEs. We concluded that we are the primary beneficiary of each and consolidated the VIEs in accordance with the accountingstandard for consolidation.US Bancorp’s contributions, net of syndication fees and other direct costs incurred in structuring the NMTC arrangements, are included in Non-controlling Interests on the Consolidated Balance Sheets. Incremental costs to maintain the structure during the compliance period arerecognized as incurred to selling, general and administrative expense.117Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements The assets and liabilities of our consolidated VIEs were $140.9 million and $104.2 million, respectively, as of December 31, 2014 and 2013.The assets of the VIEs serve as the sole source of repayment for the debt issued by these entities. US Bank does not have recourse to us orour other assets, with the exception of customary representations and indemnities we have provided. We are not required and do not currentlyintend to provide additional financial support to these VIEs. While these subsidiaries are included in our consolidated financial statements,these subsidiaries are separate legal entities and their assets are legally owned by them and not available to our creditors.(13)Commitments and ContingenciesOperating Leases as LesseeWe lease business offices, have entered into site lease agreements and use satellite transponder and fiber capacity and certain equipmentpursuant to operating lease arrangements. Many of our leases are for multiple years and contain renewal options. Rental costs under sucharrangements amounted to $43.8 million, $46.5 million and $37.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.Capital Leases as LesseeWe entered into a long-term capital lease agreement in 1991 with the wife of GCI’s President and CEO for property occupied by us as furtherdescribed in Note 11, Related Party Transactions.We have a capital lease agreement for transponder capacity on Intelsat, Ltd.’s (“Intelsat”) Galaxy 18 spacecraft. The Intelsat Galaxy 18 C-band and Ku-Band transponders are being leased over an expected term of 14 years. At lease inception the present value of the leasepayments, excluding telemetry, tracking and command services and back-up protection, was $98.6 million. We amended our transpondercapacity lease agreement with Intelsat in October 2013 to lease additional transponder capacity on Intelsat's Galaxy 18 spacecraft. As aresult, on January 1, 2014 we increased our existing capital lease asset and liability by $9.4 million.A summary of future minimum lease payments follows (amounts in thousands):Years ending December 31:Operating Capital2015$38,830 13,444201634,892 13,454201726,772 13,433201822,666 13,440201920,157 13,4502020 and thereafter63,809 33,208Total minimum lease payments$207,126 100,429Less amount representing interest 23,973Less current maturity of obligations under capital leases 8,100Long-term obligations under capital leases, excluding current maturity $68,356The leases generally provide that we pay the taxes, insurance and maintenance expenses related to the leased assets. Several of our leasesinclude renewal options, escalation clauses and immaterial amounts of contingent rent expense. We expect that in the normal course ofbusiness leases that expire will be renewed or replaced by leases on other properties.Guaranteed Service LevelsCertain customers have guaranteed levels of service with varying terms. In the event we are unable to provide the minimum service levels wemay incur penalties or issue credits to customers.118Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements Self-InsuranceThrough December 31, 2014, we were self-insured for losses and liabilities related to health and welfare claims up to $500,000 per incident peryear above which third party insurance applied. A reserve of $4.0 million and $3.1 million was recorded at December 31, 2014 and 2013,respectively, to cover estimated reported losses, estimated unreported losses based on past experience modified for current trends, andestimated expenses for settling claims. We are self-insured for all losses and liabilities related to workers’ compensation claims in Alaska andhave a workers compensation excess insurance policy to make claims for any losses in excess of $500,000 per incident. A reserve of $3.8million and $3.7 million was recorded at December 31, 2014 and 2013, respectively, to cover estimated reported losses and estimatedexpenses for open and active claims. Actual losses will vary from the recorded reserves. While we use what we believe are pertinentinformation and factors in determining the amount of reserves, future additions to the reserves may be necessary due to changes in theinformation and factors used.We are self-insured for damage or loss to certain of our transmission facilities, including our buried, undersea, and above-ground transmissionlines. If we become subject to substantial uninsured liabilities due to damage or loss to such facilities, our financial position, results ofoperations or liquidity may be adversely affected.Litigation, Disputes, and Regulatory MattersWe are involved in various lawsuits, billing disputes, legal proceedings, and regulatory matters that have arisen from time to time in the normalcourse of business. Management believes there are no proceedings from asserted and unasserted claims which if determined adverselywould have a material adverse effect on our financial position, results of operations or liquidity.Universal ServiceAs an ETC, we receive support from the USF for the provision of wireline local access and wireless service in high cost areas. In November2011, the FCC published a final rule that segregated the support methodology for Remote and Urban areas in Alaska as further described inNote 1(u). For both Remote and Urban high cost support revenue, our ability to collect our accrued USF support is contingent uponcontinuation of the USF program and upon our eligibility to participate in that program, which are subject to change by future regulatory,legislative or judicial actions. We adjust revenue and the account receivable in the period the FCC makes a program change or we assess thelikelihood that such a change has increased or decreased revenue. Our revenue for providing local and wireless services in these areas wouldbe materially adversely affected by a substantial reduction of USF support.Cable Service Rate ReregulationFederal law permits regulation of basic cable programming services rates. However, Alaska law provides that cable television service isexempt from regulation by the RCA unless 25% of a system’s subscribers request such regulation by filing a petition with the RCA. AtDecember 31, 2014, only the Juneau system is subject to RCA regulation of its basic service rates. No petition requesting regulation has beenfiled for any other system. The Juneau system serves 6% of our total basic service subscribers at December 31, 2014.Tribal Mobility Fund I GrantIn February 2014, the FCC announced our winning bids in the Tribal Mobility Fund I auction for a $41.4 million grant to partially fund expansionof our 3G wireless network, or better, to locations in Alaska where we would not otherwise be able to construct within our return-on-investmentrequirements. We filed a long-form application with the FCC by their deadline and this form was approved in October 2014. We expect toreceive one-third of the grant funds in the first half of 2015 and between $6.0 and $16.0 million in additional grant fund disbursements in 2015,depending on upgrades completed and test results submitted to and approved by the FCC.119Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (14)Selected Quarterly Financial Data (Unaudited)During the fourth quarter of 2014, we identified an immaterial error in the calculation of our estimated effective tax rate that impacted each ofthe previously reported quarters of 2014. The error had no effect on previously reported Adjusted EBITDA or cash flows. In order to assessmateriality of this error we considered SAB 99, “Materiality” and SAB 108, “Considering the Effects of Prior Year Misstatements whenQuantifying Misstatements in Current Year Financial Statements,” and determined that the impact of this error on prior period consolidatedfinancial statements was immaterial. As provided by SAB 108, the portion of the immaterial error will not require the previously filed quarterlyreports on Form 10-Q to be amended and the correction is permitted to be made the next time we file our prior period financial statements.The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2014 and 2013 including the impactof the immaterial error correction adjustments discussed above (amounts in thousands, except per share amounts):120Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements As of March 31, 2014 As of June 30, 2014 As of September 30, 2014 PreviouslyreportedCorrectionAs adjusted PreviouslyreportedCorrectionAs adjusted PreviouslyreportedCorrectionAs adjusted Deferred income taxliability$158,104981159,085 166,6653,209169,874 160,7995,806166,605 Total liabilities$1,550,9899811,551,970 1,595,6833,2091,598,892 1,556,3945,8061,562,200 Retained earnings$119,111(981)118,130 127,266(3,209)124,057 139,778(5,806)133,972 Total GCI stockholders'equity$161,380(981)160,399 171,748(3,209)168,539 185,150(5,806)179,344 Total stockholders'equity$458,811(981)457,830 465,461(3,209)462,252 482,295(5,806)476,489 First Quarter Second Quarter Third QuarterFourthQuarter2014PreviouslyreportedCorrectionAs adjusted PreviouslyreportedCorrectionAs adjusted PreviouslyreportedCorrectionAs adjustedTotal revenues$216,283—216,283 224,399—224,399 240,725—240,725228,791Operating income$30,265—30,265 38,414—38,414 49,336—49,33625,547Income tax expense$(215)(981)(1,196) (127)(2,228)(2,355) (2,481)(2,597)(5,078)(1,400)Net income$11,742(981)10,761 19,068(2,228)16,840 28,444(2,597)25,8475,796Net income (loss)attributable to GCI$2,121(981)1,140 8,155(2,228)5,927 12,512(2,597)9,915(9,425)Basic net income (loss)attributable to GCIper common share$0.05(0.02)0.03 0.20(0.06)0.14 0.30(0.06)0.24(0.24)Diluted net income(loss) attributable toGCI per commonshare$0.05(0.02)0.03 0.20(0.06)0.14 0.30(0.06)0.24(0.24) 2013First QuarterSecondQuarterThirdQuarter FourthQuarter Total revenues$186,216189,661217,943 217,828 Operating income$23,06025,69538,684 25,423 Net income (loss)attributable to GCI$3,2444,1808,905 (6,923) Basic net income (loss)attributable to GCIper common share$0.080.100.22 (0.17) Diluted net income(loss) attributable toGCI per commonshare$0.080.100.22 (0.17) (15)Subsequent EventsOn February 2, 2015, we purchased ACS Wireless’s interest in AWN and substantially all the assets of ACS and its affiliates related to ACS’swireless business (the “Acquired Assets”) for a cash payment of $293.2 million, subject to possible post-closing adjustments. The AcquiredAssets included all of ACS Wireless' equity interest in AWN, substantially all of ACS’s wireless subscriber assets, including subscribercontracts, and certain of ACS’s CDMA network assets, including fiber strands and associated cell site electronics and microwave121Table of ContentsGENERAL COMMUNICATION, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements facilities and associated electronics. GCI did not acquire certain excluded assets specified in the agreement. GCI assumed from ACS post-closing liabilities of ACS and its affiliates under contracts assumed by GCI and liabilities with respect to the ownership by ACS Wireless of itsequity interest in AWN to the extent accruing and related to the period after closing. All other liabilities were retained by ACS and its affiliates.To fund the 2015 purchase from ACS, on February 2, 2015 GCI Holdings entered into a Fourth Amended and Restated Credit and GuaranteeAgreement with Credit Agricole that included $275.0 million of a Term B Loan. The interest rate under the Term B Loan is LIBOR plus 3.75%,with a 1% LIBOR floor. The Term B Loan will mature on February 2, 2022 or December 3, 2020 if our Senior Notes due 2021 are not refinancedprior to such date. We sold an unsecured promissory note to Searchlight ALX, L.P. ("Searchlight") in the principal amount of $75.0 million thatwill mature on February 2, 2023 and will bear interest at a rate of 7.5% per year ("Searchlight Note"). A portion of the proceeds from theSearchlight Note were used to finance the ACS transaction described above and the remainder will be used for general corporate purposes.Additionally, we entered into a Stock Appreciation Rights Agreement pursuant to which we issued to Searchlight three million stockappreciation rights which entitles Searchlight to receive, upon exercise, an amount payable at our election in either cash or shares of GCI'sClass A common stock equal in value to the excess of the fair market value of a share of GCI Class A common stock on the date of exerciseover the price of $13.00.122Table of ContentsItem 15(b). ExhibitsListed below are the exhibits that are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):Exhibit No.Description Where Located2.1Amendment, dated as of October 1, 2012, to Asset Purchase and ContributionAgreement, dated as of June 4, 2012, among Alaska Communications SystemsGroup, Inc., General Communication, Inc., ACS Wireless, Inc., GCI WirelessHoldings, LLC and The Alaska Wireless Network, LLC Incorporated by reference to The Company'sReport on Form 8-K for the period October 1,2012 filed October 2, 2012.2.2Purchase and Sale Agreement between Alaska Communications Systems Group,Inc. with General Communication, Inc., an Alaska corporation (“GCI”), GCICommunication Corp., an Alaska corporation and wholly owned subsidiary of GCI,ACS Wireless, Inc., an Alaska corporation and wholly owned subsidiary of ACS,GCI Wireless Holdings, LLC, an Alaska limited liability company and wholly ownedsubsidiary of GCI and The Alaska Wireless Network, LLC, a Delaware limitedliability company * 3.1Restated Articles of Incorporation of the Company dated August 20, 2007 Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 2007 filed March 7,2008.3.2Amended and Restated Bylaws of the Company dated September 26, 2014 Incorporated by reference to The Company’sReport on Form 8-K for the periodSeptember 26, 2014 filed October 2, 2014.4.1General Communication, Inc. Amended and Restated 1986 Stock Option Plan* 4.2Securityholder Agreement by and between General Communication, Inc. andSearchlight ALX, L.P. dated as of December 4, 2014 * 4.3Unsecured Promissory Note Due 2023 entered into as of February 2, 2015 by andbetween General Communication, Inc. and Searchlight ALX, L.P. * 4.4Stock Appreciation Rights Agreement entered into as of February 2, 2015 by andbetween General Communication, Inc. and Searchlight ALX, L.P. * 10.1Order approving Application for a Certificate of Public Convenience and Necessity tooperate as a Telecommunications (Intrastate Interexchange Carrier) Public Utilitywithin Alaska Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 1991.10.2The GCI Special Non-Qualified Deferred Compensation Plan1 Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 1995.10.3Transponder Purchase Agreement for Galaxy X between Hughes CommunicationsGalaxy, Inc. and GCI Communication Corp. Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 1995.10.4Lease Agreement dated September 30, 1991 between RDB Company and GeneralCommunication, Inc. Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 1991.10.5Transponder Lease Agreement between General Communication Incorporated andHughes Communications Satellite Services, Inc., executed August 8, 1989 Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 1993.123Table of ContentsExhibit No.Description Where Located10.6Addendum to Galaxy X Transponder Purchase Agreement between GCICommunication Corp. and Hughes Communications Galaxy, Inc. dated August 24,1995 Incorporated by reference to The Company’sAmendment No. 1 to Form S-3/ARegistration Statement (File No. 333-28001)dated July 8, 1997.10.7First Amendment to Lease Agreement dated as of September 2002 between RDBCompany and GCI Communication Corp. as successor in interest to GeneralCommunication, Inc. Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 2002.10.8Aircraft lease agreement between GCI Communication Corp., and Alaskacorporation and 560 Company, Inc., an Alaska corporation, dated as of January 22,2001 Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 2002.10.9First amendment to aircraft lease agreement between GCI Communication Corp.,and Alaska corporation and 560 Company, Inc., an Alaska corporation, dated as ofFebruary 8, 2002 Incorporated by reference to The Company’sAnnual Report on Form 10-K for the yearended December 31, 2002.10.10Full-time Transponder Capacity Agreement with PanAmSat Corporation dated March31, 2006 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended March 31, 2006.10.11Registration Rights Agreement dated as of March 5, 2007 between GeneralCommunication, Inc. and John W. Stanton and Theresa E. Gillespie Incorporated by reference to Exhibit 3 of theSchedule 13D dated March 5, 2007 filed onMarch 12, 2007.10.12Second Amendment to Lease Agreement dated as of April 8, 2008 between RDBCompany and GCI Communication Corp. as successor in interest to GeneralCommunication, Inc. Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended March 31, 2008.10.13Fifth Amendment to the Amended and Restated Credit Agreement dated as ofOctober 17, 2008 by and among Holdings, Inc. the other parties thereto and CalyonNew York Branch, as administrative agent, and the other Lenders party thereto Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2008.10.14First Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication Corp. dated February 15, 2008 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.10.15Second Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication Corp. dated April 9, 2008 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.10.16Third Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication Corp. dated June 4, 2008 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.10.17Fourth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication Corp. dated June 4, 2008 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.10.18Fifth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication Corp. dated September 30, 2008 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.10.19Sixth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication Corp. dated October 31, 2008 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.124Table of ContentsExhibit No.Description Where Located10.20Seventh Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication Corp. dated November 6, 2008 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.10.21Eighth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication Corp. dated June 8, 2009 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2009.10.22Indenture dated as of November 3, 2009 between GCI, Inc. and Union Bank, N.A.,as trustee Incorporated by reference to GCI, Inc.'sReport on Form 8-K for the period November3, 2009 filed November 5, 2009.10.23Second Amended and Restated Credit Agreement dated as of January 29, 2010 byand among GCI Holdings, Inc., the other parties thereto and Calyon New YorkBranch, as administrative agent, and the other Lenders party thereto Incorporated by reference to The Company'sReport on Form 8-K for the period January29, 2010 filed February 3, 2010.10.24Ninth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication, Corp. dated June 29, 2010 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended June 30, 2010 filed August 5, 2010.10.25Amended and restated aircraft lease agreement between GCI Communication Corp.,and Alaska corporation and 560 Company, Inc., an Alaska corporation, dated as ofFebruary 25, 2005 Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2010, filed March 15,2011.10.26First amendment to the amended and restated aircraft lease agreement betweenGCI Communication Corp., and Alaska corporation and 560 Company, Inc., anAlaska corporation, dated as of December 27, 2010 Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2010, filed March 15,2011.10.27Tenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication, Corp. dated September 24, 2010 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2010, filed March 15,2011.10.28Eleventh Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication, Corp. dated September 23, 2010 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2010, filed March 15,2011.10.29Twelfth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch)between Intelsat Corporation, formerly known as PanAmSat Corporation and GCICommunication, Corp. dated November 5, 2010 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2010, filed March 15,2011.10.30Broadband Initiatives Program Loan/Grant and Security Agreement between UnitedUtilities, Inc. and the United States of America dated as of June 1, 2010 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2010, filed March 15,2011.10.31Indenture dated as of May 20, 2011 between GCI, Inc. and Union Bank, N.A., astrustee Incorporated by reference to GCI, Inc.'sReport on Form 8-K for the period May 20,2011 filed May 25, 2011.10.32Supplemental Indenture dated as of May 23, 2011 between GCI, Inc. and UnionBank, N.A., as trustee Incorporated by reference to GCI, Inc.'sReport on Form 8-K for the period May 20,2011 filed May 25, 2011.125Table of ContentsExhibit No.Description Where Located10.33Add-on Term Loan Supplement No. 1, dated as of June 10, 2011 to the SecondAmended and Restated Credit and Guarantee Agreement, dated as of January 29,2010, among GCI Holdings, Inc., GCI, Inc., the Subsidiary Guarantors party thereto,the Lenders party thereto, Credit Agricole Corporate and Investment Bank, asAdministrative Agent, and the other Agents named therein. Incorporated by reference to The Company'sReport on Form 8-K for the period June 10,2011 filed June 14, 2011.10.34Second Amended and Restated Aircraft Lease Agreement between GCICommunication Corp., an Alaska corporation and 560 Company, Inc., an Alaskacorporation, dated May 9, 2011 Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended June 30, 2011 filed August 9, 2011.10.35Add-on Term Loan Supplement No. 2, dated as of July 22, 2011 to the SecondAmended and Restated Credit and Guarantee Agreement, dated as of January 29,2010, among GCI Holdings, Inc., GCI, Inc., the Subsidiary Guarantors party thereto,the Lenders party thereto, Credit Agricole Corporate and Investment Bank, asAdministrative Agent, and the other Agents named therein. Incorporated by reference to The Company'sReport on Form 8-K for the period July 22,2011 filed July 26, 2011.10.36Credit Agreement dated August 30, 2011 by and between Unicom, Inc. as borrowerand Northern Development Fund VIII, LLC as Lender and Travois New MarketsProject CDE X, LLC as Lender and Waveland Sub CDE XVI, LLC as Lender andAlaska Growth Capital Bidco, Inc. as Disbursing Agent Incorporated by reference to The Company'sReport on Form 8-K for the period August30, 2011 filed September 6, 2011.10.37Asset Purchase and Contribution Agreement Dated as of June 4, 2012 By andAmong Alaska Communications Systems Group, Inc., ACS Wireless, Inc., GeneralCommunication, Inc., GCI Wireless Holdings, LLC and The Alaska WirelessNetwork, LLC # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended June 30, 2012 filed August 6, 2012.10.38Add-on Term Loan Supplement No. 3, dated as of July 31, 2012 to the SecondAmended and Restated Credit and Guarantee Agreement, dated as of January 29,2010, among GCI Holdings, Inc., GCI, Inc., the Subsidiary Guarantors party thereto,the Lenders party thereto, Credit Agricole Corporate and Investment Bank, asAdministrative Agent, and the other Agents named therein. Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended June 30, 2012 filed August 6, 2012.10.39Credit Agreement dated October 3, 2012 by and between Unicom, Inc. as borrowerand USBCDE Sub-CDE 74, LLC as Lender and Cherokee Nation Sub-CDE II, LLCas Lender and LBCDE Sub2, LLC as Lender and Waveland Sub CDE XXII, LLC asLender Incorporated by reference to The Company'sReport on Form 8-K for the period October 3,2012 filed October 9, 2012.10.40Thirteenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication, Corp. dated March 14, 2011 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2012, filed March 8,2013.10.41Fourteenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication, Corp. dated June 7, 2011 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2012, filed March 8,2013.10.42Fifteenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication, Corp. dated December 29, 2011 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2012, filed March 8,2013.10.43Sixteenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication, Corp. dated December 21, 2012 # Incorporated by reference to The Company'sAnnual Report on Form 10-K for the yearended December 31, 2012, filed March 8,2013.126Table of ContentsExhibit No.Description Where Located10.44Third Amended and Restated Credit Agreement dated as of April 30, 2013 by andamong GCI Holdings, Inc., GCI, Inc., the Subsidiary Guarantors party thereto, theLenders party thereto, Union Bank, as Syndication Agent, Suntrust Bank, asDocumentation Agent and Credit Agricole Corporate and Investment Bank, asAdministrative Agent Incorporated by reference to The Company'sReport on Form 8-K for the period April 30,2013 filed May 6, 2013.10.45Seventeenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication, Corp. dated June 4, 2013 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2013 filed November8, 2013.10.46Eighteenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporationand GCI Communication, Corp. dated October 17, 2013 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2013 filed November8, 2013.10.47First Amended and Restated Operating Agreement of The Alaska Wireless Network,LLC dated July 22, 2013 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2013 filed November8, 2013.10.48Broadband Initiatives Program Loan/Grant and Security Agreement between UnitedUtilities, Inc. and The United States of America dated June 1, 2010 Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended September 30, 2013 filed November8, 2013.10.49Nineteenth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation and GCI Communication, Corp. dated March20, 2014 # Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended March 31, 2014 filed May 5, 2014.10.50Twentieth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation and GCI Communication, Corp. dated August11, 2014 # * 10.51Fourth Amended and Restated Credit Agreement dated as of February 2, 2015 byand among GCI Holdings, Inc., GCI, Inc., the Subsidiary Guarantors party thereto,the Lenders party thereto, Union Bank, as Syndication Agent, Suntrust Bank, asDocumentation Agent and Credit Agricole Corporate and Investment Bank, asAdministrative Agent * 10.52Description of Incentive Compensation Plan for Named Executive Officers1 * “Executive Compensation” in Part III of thisAnnual Report on Form 10-K for the yearending December 31, 2014.14Code Of Business Conduct and Ethics (originally reported as exhibit 10.118) Incorporated by reference to The Company’sQuarterly Report on Form 10-Q for the periodended March 31, 2004.21.1Subsidiaries of the Registrant * 23.1Consent of Grant Thornton LLP (Independent Public Accountant for Company) * 31Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * 32Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section906 of the Sarbanes-Oxley Act of 2002 * 127Table of ContentsExhibit No.Description Where Located101The following materials from General Communication, Inc.'s Annual Report on Form10-K for the year ended December 31, 2014, formatted in XBRL (eXtensibleBusiness Reporting Language): (i) Consolidated Balance Sheets as of December 31,2014 and 2013; (ii) Consolidated Income Statements for the years ended December31, 2014, 2013 and 2012; (iii) Consolidated Statements of Stockholders' Equity forthe years ended December 31, 2014, 2013 and 2012; (iv) Consolidated Statementsof Cash Flows for the years ended December 31, 2014, 2013 and 2012; and (v)Notes to Consolidated Financial Statements * #CONFIDENTIAL PORTION has been omitted pursuant to a request for confidential treatment by us to, and the material has beenseparately filed with, the SEC. Each omitted Confidential Portion is marked by three asterisks.*Filed herewith.1 Constitute management contracts or compensatory plans. 128Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to besigned on its behalf by the undersigned thereunto duly authorized.GENERAL COMMUNICATION, INC. By:/s/ Ronald A. Duncan Ronald A. Duncan, President(Chief Executive Officer) Date:March 5, 2015 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalfof the registrant and in the capacities and on the date indicated.Signature Title Date /s/ Stephen M. Brett Chairman of Board and Director March 5, 2015Stephen M. Brett /s/ Ronald A. Duncan President and Director(Principal Executive Officer) March 5, 2015Ronald A. Duncan /s/ Bridget L. Baker Director March 5, 2015Bridget L. Baker /s/ Jerry A. Edgerton Director March 5, 2015Jerry A. Edgerton /s/ Scott M. Fisher Director March 5, 2015Scott M. Fisher /s/ William P. Glasgow Director March 5, 2015William P. Glasgow Director Mark W. Kroloff /s/ Stephen R. Mooney Director March 5, 2015Stephen R. Mooney /s/ James M. Schneider Director March 5, 2015James M. Schneider Eric L. Zinterhofer Director /s/ Peter J. Pounds Senior Vice President, Chief FinancialOfficer, and Secretary(Principal Financial Officer) March 5, 2015Peter J. Pounds /s/ Lynda L. Tarbath Vice President, Chief AccountingOfficer (Principal Accounting Officer) March 5, 2015Lynda L. Tarbath 129Exhibit 2.2EXECUTION COPYPURCHASE AND SALE AGREEMENTDATED AS OF DECEMBER 4, 2014BY AND AMONGALASKA COMMUNICATIONS SYSTEMS GROUP, INC.,ACS WIRELESS, INC.,GCI COMMUNICATION CORP.,GCI WIRELESS HOLDINGS, LLCGENERAL COMMUNICATION, INC.ANDTHE ALASKA WIRELESS NETWORK, LLCBUS_RE/5486564.1TABLE OF CONTENTSPageSECTION 1. DEFINED TERMS 11.1 Terms Defined in this Section 11.2 Clarifications 17SECTION 2. AGREEMENT TO PURCHASE AND SELL; PURCHASE PRICE 172.1 Purchase and Sale of Assets 172.2 Purchase Price 182.3 Purchase Price Adjustments and Special Distribution 192.4 Excluded Assets 232.5 Assumed Liabilities 242.6 Excluded Liabilities 25SECTION 3. REPRESENTATIONS AND WARRANTIES REGARDING ACS AND ACS WIRELESS 263.1 Organization, Standing and Authority 263.2 Authorization and Binding Obligation 263.3 Absence of Conflicting Agreements 263.4 Claims and Legal Actions 273.5 Compliance with Laws 273.6 Solvency 27SECTION 4. REPRESENTATIONS AND WARRANTIES REGARDING THE ACS ASSETS AND THE ACS AWNINTEREST 274.1 Sufficiency of Assets 284.2 Contracts 284.3 Title to and Condition of Leased Property 294.4 Intellectual Property 294.5 Consents 294.6 Licenses and FCC Matters 304.7 Insurance and Bonds 304.8 Environmental Law 304.9 Taxes and Tax Returns 304.10 Conduct of Activities in Ordinary Course 304.11 Unions 314.12 Software and Hardware 314.13 ACS AWN Interest 314.14 Accounts Receivable 314.15 Drop Circuits 314.16 Dedicated Microwave Circuits 324.17 IT Systems Architecture 32-i-BUS_RE/5486564.1TABLE OF CONTENTS (Continued)Page4.18 CDMA Core Assets 324.19 Full Disclosure 32SECTION 5. REPRESENTATIONS AND WARRANTIES OF GCI PARENT, GCI AND GCI WIRELESS 325.1 Organization, Standing and Authority 325.2 Authorization and Binding Obligation 325.3 Absence of Conflicting Agreements 325.4 Consents 335.5 Claims and Legal Actions 335.6 Investment Intent 335.7 Ability to Obtain Financing 335.8 Full Disclosure 33SECTION 6. COVENANTS 336.1 Pre-Closing Covenants 336.2 GCI Promotion Activities 376.3 Further Assurances 376.4 Form 8-K Filing 376.5 CommSoft Authorization 37SECTION 7. SPECIAL COVENANTS AND AGREEMENTS 377.1 Consents 377.2 Cooperation 387.3 Taxes, Fees and Expenses 397.4 Brokers 407.5 Employee Matters 407.6 Risk of Loss 407.7 Post-Closing Access to Information 417.8 Post-Closing Consents and Subsequent Transfers 417.9 Confidentiality/Press Releases 427.10 Antitrust Notice 437.11 CETC Amounts 447.12 Allocation 447.13 Forwarding Inquiries and Payments; Collection of Accounts Receivable 457.14 Transaction Opinion 457.15 Covenants Not To Compete or Solicit 457.16 Leases 467.17 Post Closing Deliveries 467.18 Financial Reporting 477.19 Excluded Business Customers 47SECTION 8. CONDITIONS TO THE OBLIGATIONS TO CLOSE 488.1 Conditions to Obligations of ACS Group 488.2 Conditions to Obligations of GCI and GCI Wireless 49-ii-BUS_RE/5486564.1TABLE OF CONTENTS (Continued)PageSECTION 9. CLOSING AND CLOSING DELIVERIES 529.1 Time and Place of Closing 529.2 Deliveries by ACS and ACS Wireless 529.3 Deliveries by GCI 53SECTION 10. RIGHTS OF THE PARTIES ON TERMINATION OR BREACH 5310.1 Termination Rights 5310.2 Specific Performance 54SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 5411.1 Affiliates 5411.2 Survival 5411.3 Indemnification by ACS 5511.4 Indemnification by GCI 5611.5 Procedure for Indemnification 5611.6 Limitations 5711.7 Taxes 5911.8 Treatment of Indemnification Payments 5911.9 Exclusive Remedy 59SECTION 12. MISCELLANEOUS 5912.1 Notices 5912.2 Benefit and Binding Effect 6012.3 Entire Agreement 6112.4 Waiver of Compliance; Consents 6112.5 Severability 6112.6 Prevailing Party 6112.7 No Consequential or Indirect Damages 6112.8 Governing Law 6112.9 Selection of Forum; Venue; Service of Process 6112.10 WAIVER OF JURY TRIAL 6212.11 Counterparts 62-iii-BUS_RE/5486564.1LIST OF EXHIBITSExhibit A – Form of Instrument of AssignmentExhibit B – Form of Instrument of AssumptionExhibit C – Form of Assignment of Ownership InterestExhibit D – ACS Knowledge GroupExhibit E – GCI Knowledge GroupExhibit F – Form of Escrow AgreementExhibit G – Form of Telular AgreementExhibit H – Form of BIT AgreementExhibit I – Form of Transition Services AgreementExhibit J – Form of IP License AgreementsExhibit K – Form of Omnibus Amendment AgreementExhibit L – Form of CommSoft Authorization NoticeLIST OF SCHEDULESSchedule 1.1(a)– Specified ConsentsSchedule 1.1(b)– Third Party IRUsSchedule 2.3– Purchase Price AdjustmentsSchedule 2.4– Excluded AssetsSchedule 3.4 – Claims and Legal ActionsSchedule 3.5 – Compliance with LawsSchedule 4.1 – Sufficiency of AssetsSchedule 4.2 – ContractsSchedule 4.5 – ACS ConsentsSchedule 4.6 – LicensesSchedule 4.7 – Insurance and BondsSchedule 4.8 – Environmental LawsSchedule 4.13 – ACS AWN InterestSchedule 4.15 – Drop CircuitsSchedule 4.16 – Dedicated Microwave CircuitsSchedule 4.17 – IT Systems Architecture Schedule 4.18 – CDMA Core Assets Schedule 5.4 – GCI ConsentsSchedule 7.4 – Brokers Schedule 7.8 – Subscriber Contract Consent ListSchedule 7.13 – Wireless Payment Allocation PoliciesSchedule 7.15 – Non-Solicitation Schedule 9.2 – Network InformationLIST OF SCHEDULES PROVIDED SEPARATELYLeased Property Schedule Allocation Schedule-iv-BUS_RE/5486564.1PURCHASE AND SALE AGREEMENTThis PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated as of December 4, 2014 (the “Signing Date”),by and among Alaska Communications Systems Group, Inc., a Delaware corporation (“ACS”), ACS Wireless, Inc., an Alaskacorporation (“ACS Wireless”), GCI Communication Corp., an Alaska corporation (“GCI”), GCI Wireless Holdings, LLC, an Alaskalimited liability company (“GCI Wireless”), The Alaska Wireless Network, LLC, a Delaware limited liability company (the“Company”), and General Communication, Inc., an Alaska corporation (“GCI Parent”). Capitalized terms used and not otherwisedefined in this Agreement have the meanings given such terms in Section 1.R E C I T A L S:A. ACS and its Affiliates are engaged in the ACS Wireless Activities.B. ACS Wireless and GCI Wireless are the sole members of the Company.C. The ACS Group desires to sell to GCI, and GCI desires to purchase from the ACS Group, the ACS Assets, on the termsand conditions set forth in this Agreement.D. ACS Wireless desires to sell to GCI Wireless, and GCI Wireless desires to purchase from ACS Wireless, the ACS AWNInterest, on the terms and conditions set forth in this Agreement.E. This Agreement (together with the Ancillary Agreements) is intended to provide GCI and its subsidiaries with the ACSAssets and all rights held by ACS and its subsidiaries that are necessary to provide retail wireless services to Subscribers and to operatethe ACS Assets. Consistent with this intent, no continuing obligations, costs, or expenses would be payable by GCI, the Company ortheir affiliates to ACS or its subsidiaries, to secure such ACS Assets and the rights described in the Ancillary Agreements, except asspecifically described in this Agreement and the Ancillary Agreements.A G R E E M E N T S:In consideration of the representations, warranties, covenants and agreements contained herein and other consideration thereceipt and sufficiency of which are hereby acknowledged, each of ACS, ACS Wireless, GCI and GCI Wireless intending to belegally bound do hereby agree as follows:Section 1.DEFINED TERMS1.1 Terms Defined in this Section. The following terms shall have the following meanings in this Agreement:“Accounts Receivable” means all rights of the ACS Group to payment for providing Wireless services and products, whetherbilled or earned, to Subscribers prior to Closing in connection with the ACS Wireless Activities, including amounts receivable fromLifelineBUS_RE/5486564.1Subscribers, provided, however, that amounts receivable from federal or Alaska Universal Service Funds for Lifeline support shall notbe included in Accounts Receivable.“ACS” has the meaning given such term in the Preamble.“ACS Assets” means the ACS Subscriber Assets and ACS Network Assets, and, for the avoidance of doubt, shall not includethe ACS AWN Interest.“ACS AWN Interest” means the limited liability company membership interest in the Company held by ACS Wireless,including all rights of ACS Wireless to distributions from the Company.“ACS Board” means the board of directors of ACS.“ACS Closing Requirements” means all conditions to the obligations of GCI and GCI Wireless at the Closing under Section8.2 (other than Sections 8.2(l), (m) and (n)), and the condition to the obligations of ACS and ACS Wireless that the Specified Consentsshall have been obtained, provided that delivery of a certificate attesting to any such conditions or delivery of executed AncillaryAgreements required pursuant to Section 8.2 shall not be required to be delivered so long as ACS stands willing and able to make suchdeliveries.“ACS Group” means ACS and its Affiliates.“ACS Network Assets” means the rights, property, and Contracts of the ACS Group used in the operation of the CDMAWireless network, as listed in Section 2.1(a), but excluding the Excluded Assets, as more particularly described in Section 2.4.“ACS Services Agreement” means the ACS Services Agreement dated June 4, 2012, by and between ACS Wireless and theCompany.“ACS Subscriber Assets” means all of the rights and Contracts of the ACS Group used to provide goods and services toSubscribers, as more particularly described in Section 2.1(b), but excluding the Excluded Assets, as more particularly described inSection 2.4.“ACS Wireless” has the meaning given such term in the Preamble.“ACS Wireless Activities” means the retail wireless voice and data services business conducted by the ACS Group, includingthe sale to Subscribers of wireless voice and data services provided by the Company.“Actual Postpaid Subscriber Count” means the difference between (a) the actual number of Postpaid Subscribers of theACS Wireless Activities and (b) the actual number of Nonqualifying Subscribers who are Postpaid Subscribers included in clause (a),in each case on the Closing Date (or, if the Closing has not occurred on or before the Target Closing Date, the later of (i) the TargetClosing Date or (ii) the date on which the Subscriber Adjustment Conditions have been satisfied or waived).2BUS_RE/5486564.1“Actual Prepaid Subscriber Count” means the difference between (a) the actual number of Prepaid Subscribers of the ACSWireless Activities and (b) the actual number of Nonqualifying Subscribers who are Prepaid Subscribers included in clause (a), in eachcase on the Closing Date (or, if the Closing has not occurred on or before the Target Closing Date, the later of (i) the Target ClosingDate or (ii) the date on which the Subscriber Adjustment Conditions have been satisfied or waived).“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries,controls, is controlled by, or is under common control with such Person, except that, prior to the Closing, the Company shall not bedeemed to be an Affiliate of either Member. For purposes of this definition, “control” (including the terms “controlled by,” and “undercommon control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management orpolicies of a Person, whether through the ownership of voting securities or partnership or other ownership interests, by contract, orotherwise.“Affiliate Contract” means any Contract between a Person in the ACS Group, on the one hand, and one or more of suchPerson’s Affiliates, on the other hand.“Agreement” has the meaning given such term in the Preamble.“Allocation Schedule” has the meaning given such term in Section 7.12.“Ancillary Agreements” means the Escrow Agreement, the Telular Agreement, the BIT Agreement, the Transition ServicesAgreement, the IP License Agreements, the A&R ACS Services Agreement, the Omnibus Amendment Agreement, the TransitionSupport Agreement and any other agreements and instruments executed and delivered in connection with this Agreement or theAncillary Agreements.“Antitrust Division” has the meaning given such term in Section 7.10.“Antitrust Law” means the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act, and all otherfederal, state and foreign statutes, rules, regulations, orders, decrees, administrative and judicial doctrines and other laws that aredesigned or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade orlessening of competition.“A&R ACS Services Agreement” means the Amended and Restated ACS Services Agreement.“Assignment of Ownership Interest” means the Assignment of Ownership Interest substantially in the form of Exhibit C.“Assumed Contracts” means (a) the Contracts listed in Schedule 4.2 other than Contracts that GCI elects not to assumepursuant to Section 7.8(b), (b) all Subscriber Contracts other than Excluded Business Customer Contracts and Contracts that GCIelects not to assume pursuant to Section 7.8(a), and (c) all Assumed Leases.3BUS_RE/5486564.1“Assumed Leases” has the meaning given such term in Section 7.16.“Assumed Leases Assumption Date” means the date that is ten Business Days after the Transition Completion Date.“Assumed Liabilities” has the meaning given such term in Section 2.5.“Assumed Subscriber Liabilities” means (a) any remaining liability of ACS to Prepaid Subscribers or Postpaid Subscribers toprovide Wireless services for which such Prepaid Subscribers or Postpaid Subscribers have paid, (b) any liability of ACS toSubscribers for deposits and (c) any liability for Taxes collected or withheld from Subscribers whose Contracts are included in theACS Subscriber Assets that is required to be paid by GCI on or after the Closing Date, including E911 payments.“AWN Account Payable” means the aggregate amount owed by ACS Wireless to the Company for plans, services, and othercharges pursuant to the FNUA provided through the Closing Date, less the aggregate amount owed by the Company to ACS Wirelessfor services provided, shared third party charges and ACS Wireless equipment subsidy reimbursements through the Closing Date. Such amount shall be determined as follows: For charges with respect to the period from February through August 2014, such amountshall be the unpaid portion of the “Total Net Due to AWN” as set forth in the analysis sent to the Company by ACS Wireless onOctober 14, 2014. For charges with respect to the period from September 2014 through the Closing Date, such amount shall be (a) fortraditional postpaid plans and services, the unpaid portion of an amount equal to 70% of retail revenues with respect to such plans plus$100,000 per month (prorated for any portion of a month), and (b) for all plans other than those described in clause (a), the unpaidportion of an amount equal to the Company’s charges at the Company’s wholesale rates for such plans and services (prorated for anyportion of a month).“Bankruptcy Event” means, with respect to any Person, the commencement or occurrence of any of the following: (a) avoluntary or involuntary case under Title 11 of the U.S. Code (the “Bankruptcy Code”), as now constituted or hereafter amended, orunder any other applicable federal, state or foreign bankruptcy or insolvency law or other similar law, in which such Person is a debtor;(b) the appointment of (or a proceeding to appoint) a trustee or receiver for a substantial portion of such Person’s property interest, or acustodian (as such term is defined in section 101 of the Bankruptcy Code); (c) an attachment, execution or other judicial seizure of (ora proceeding to attach, execute or seize) a substantial property interest of such Person; (d) a general assignment for the benefit ofcreditors; (e) the taking of, failure to take, or submission to any action indicating (after reasonable investigation) an inability to meet itsobligations as they accrue; or (f) the general failure to pay debts as such debts become due.“Baseline Postpaid Subscriber Count” means 86,000 Postpaid Subscribers, reduced by one percent for each month (or a prorata portion of one percent for any partial month) after the Signing Date and before the Closing Date. For the purposes of the foregoingdefinition, a “month” means the 30-day period beginning the day after the Signing Date, and, as applicable, any subsequent 30-dayperiod.4BUS_RE/5486564.1“Baseline Prepaid Subscriber Count” means 18,000 Prepaid Subscribers.“Base Purchase Price” has the meaning given such term in Section 2.2.“Basket” has the meaning given such term in Section 11.6(c).“Basket/Cap Exclusions” has the meaning given such term in Section 11.6(c).“BIT Agreement” means the Backhaul, Interconnection and Transport Agreement substantially in the form of Exhibit H.“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New YorkCity or Anchorage are required or authorized by law to be closed for business.“CDMA Core” means the CDMA core electronics, equipment and facilities owned by the Company and currently operatedon its behalf by ACS pursuant to the ACS Services Agreement.“CDMA Core Assets” means (i) all Wireless equipment, inventory and property that is dedicated to the CDMA Core, (ii) anyasset acquired by ACS Wireless under the ACS Services Agreement for the CDMA Core which has been fully paid for by theCompany and (iii) the Assumed Contracts, in each case, used or useful in the provision of Wireless services by ACS and its Affiliatesin connection with the CDMA Core.“CETC Cash Flow” means all revenues from the Universal Service Fund for high cost support (including all supportdisbursed pursuant to 47 C.F.R. § 54.307 for Wireless services, 47 C.F.R. Subpart L, the FCC’s Mobility Fund or Tribal MobilityFund, or any successor or other provisions created hereafter to provide universal service support for Wireless services in rural, insularor high cost areas, as defined by the FCC) received by the ACS Group after the Closing with respect to the ACS Wireless Activitiesprior to the Closing, regardless of whether line counts were submitted prior to or after the Closing or were associated with Wirelessservice provided to end users prior to Closing.“Claimant” has the meaning given such term in Section 11.2.“Clayton Act” means title 15 of the United States Code §§ 12-27 and title 29 of the United States Code §§ 52-53.“Closing” has the meaning given such term in Section 9.1.“Closing Calculation Statement” has the meaning given such term in Section 2.3(f).“Closing Date” has the meaning given such term in Section 9.1.“COBRA” means Section 4980B of the Code and Section 601 et seq. of ERISA.5BUS_RE/5486564.1“Code” means the Internal Revenue Code of 1986, as amended from time to time (including corresponding provisions ofsubsequent revenue laws).“Company” has the meaning given such term in the Preamble.“Communications Act” means the Communications Act of 1934, as amended.“CommSoft” means Communications Software Consultants, Inc.“CommSoft System” means the software systems and services, including customer care and billing operations systemsprovided by CommSoft and related data and information utilized by such systems.“Compensation Arrangement” means any plan or compensation arrangement other than an Employee Plan, whether writtenor unwritten, which provides to employees, former employees, officers, directors or independent contractors of ACS or its Affiliates,any compensation or other benefits, whether deferred or not, in excess of base salary or wages and excluding overtime pay, includingany bonus or incentive plan, stock rights plan, deferred compensation arrangement, life insurance, stock purchase plan, severance payplan and any other perquisites and employee fringe benefit plan.“Confidentiality Agreement” means that certain Confidentiality Agreement entered into by ACS and GCI dated August 15,2014.“Consents” means all of the consents, permits or approvals of Governmental Authorities and other Third Parties (includingshareholders or members of any Party) necessary to consummate the Transactions, including the Specified Consents, and any Consentrequired to transfer and assign any Assumed Contracts.“Continuing Indemnification Obligations” has the meaning given such term in the Omnibus Amendment Agreement.“Contracts” means all contracts, leases, license agreements, undertakings and all other agreements, commitments and legallybinding arrangements, whether written or oral, relating to the ACS Wireless Activities or the ACS Assets and to which a member ofthe ACS Group is a party or which are binding upon a member of the ACS Group, including Contracts for the provision of Wirelessservices to Subscribers, Lifeline Subscriber agreements, and agreements related to the provision of Wireless services to OnStarSubscribers.“Contribution IRU Agreement” means the Fiber, Facilities, and Capacity Contribution IRU Agreement dated July 22, 2013,by and among the Company, ACS Wireless and GCI, as amended.“Damages” has the meaning given such term in Section 11.3(a).“Dedicated Microwave Circuits” means point-to-point FCC licensed and unlicensed radio frequency equipment used totransmit exclusively Wireless voice and data communications over6BUS_RE/5486564.1free space from or to a Company cell site or third party Wireless carrier cell site that was served by a member of the ACS Group onJuly 22, 2013, to a Core Connecting Point (as defined in the Contribution IRU Agreement) or another cell site, including all basebandprocessing, RF, transmission lines, antenna systems and associated cabling and attachment hardware.“Deferred Payment Amount” has the meaning given such term in Section 2.2(b).“Disputed Amounts” has the meaning given such term in Section 2.3(h)(iii).“Distribution” has the meaning given such term in the Operating Agreement.“Distribution Date” has the meaning given such term in Section 2.3(a).“Drop Circuits” means the dedicated final fiber optic facility that extends from ACS’s or its Affiliates’ network interfacedevice located at a Company or third party Wireless carrier cell site to a point of interconnection of such facility to a facility that carriesother customers’ traffic and/or circuits or to the first point of electronics, whichever comes first, in the “Drop Circuit” (as defined in theContribution IRU Agreement) in which the Company was granted an IRU by ACS in the Contribution IRU Agreement or that wasordered subsequently by the Company under the Contribution IRU Agreement. For the avoidance of doubt, Drop Circuits include theterminating electronic devices and legal title to Drop Circuits.“Effective Time” means 11:59 p.m., Alaska time, on the Closing Date.“Eligible Accounts Receivable” means an amount equal to (a) all Accounts Receivable validly recorded on ACS’s accountsreceivable detailed aging report that, as of the Closing Date, have not been outstanding for 90 days or more from date of billing minusthe Accounts Receivable from Postpaid Subscribers for any amount that is attributable to the period after the Effective Time, multipliedby (b) .95 (to reflect a discount of 5% for administrative costs of GCI after Closing for collecting and processing payments). For theavoidance of doubt, Eligible Accounts Receivable does not include CETC Cash Flow.“Enforceability Exceptions” means the exceptions or limitations to the enforcement of contract terms arising in the instance ofbankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and the application of generalprinciples of equity.“Environmental Claim” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice ofviolation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatoryor otherwise, whether at law or in equity, any order, writ, judgment, injunction, decree, stipulation, determination or award entered byor with any Governmental Authority, or any lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or fromany Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings,investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personalinjuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from:(a) the presence, release of, or7BUS_RE/5486564.1exposure to, any Hazardous Substance; or (b) any actual or alleged non‑compliance with any Environmental Law.“Environmental Law” means any statute, code or law (including common law) pertaining to land use, air, soil, surface water,groundwater (including the protection, cleanup, removal, remediation or damage thereof), the use, handling, storage, disposal orexposure to any Hazardous Substance, or any other environmental matter, including the following statutes as the same may beamended from time to time: (a) Clean Air Act (42 U.S.C. § 7401, et seq.); (b) Clean Water Act (33 U.S.C. § 1251, et seq.);(c) Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.); (d) Comprehensive Environmental Response,Compensation and Liability Act (42 U.S.C. § 9601, et seq.); (e) Safe Drinking Water Act (42 U.S.C. 300f, et seq.); (f) ToxicSubstance Control Act (15 U.S.C. § 2601, et seq.); and (g) Occupational Safety and Health Act (29 U.S.C. § 651, et seq.) andincluding any rule, regulation, order, permit or other standard request or procedure enacted, adopted, promulgated or applied by anyGovernmental Authority with respect to such matters.“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder, as ineffect from time to time.“ERISA Affiliate” means a trade or business affiliated within the meaning of Sections 414(b), (c) or (m) of the Code.“Escrow Agent” means Wells Fargo Bank, National Association, the escrow agent designated under the Escrow Agreement.“Escrow Agreement” means the Escrow Agreement substantially in the form of Exhibit F.“Escrow Amount” has the meaning given such term in Section 2.2(a).“Estimated Assumed Subscriber Liabilities” has the meaning given such term in Section 2.3(e)(iii).“Estimated AWN Account Payable” has the meaning given such term in Section 2.3(e)(iv).“Estimated Eligible Accounts Receivable” has the meaning given such term in Section 2.3(e)(ii).“Estimated Subscriber Adjustment” has the meaning given such term in Section 2.3(e)(i).“ETC Designation” means the designation by RCA as an Eligible Telecommunications Carrier for Wireless services withinthe State of Alaska.“Exchange Act” means the Securities Exchange Act of 1934, and the regulations thereunder, as in effect from time to time.8BUS_RE/5486564.1“Excluded Assets” means certain assets of the ACS Group that are not being sold, transferred, or otherwise conveyedhereunder, as specified in Section 2.4.“Excluded Business Customer Contracts” means the Contracts between the ACS Group or its Affiliates and certain businesscustomers identified therein set forth on Schedule 2.4.“Excluded Business Customer Payment” has the meaning given such term in Section 7.19.“Excluded Business Customers” means the Subscribers pursuant to an Excluded Business Customer Contract.“Excluded Liabilities” has the meaning given such term in Section 2.6.“Existing NDA” means that certain Mutual Nondisclosure Agreement dated August 15, 2014, by and between ACS and GCI,as amended.“FCC” means the Federal Communications Commission.“Federal Trade Commission Act” means title 15 of the United States Code §§ 41-58.“Fine” has the meaning given such term in Section 11.3(d).“Fixed Wireless Replacement Service” means the provision of fixed wireless replacement service by a member of the ACSGroup to the exchanges identified by community in Exhibit N-1 of the Operating Agreement.“FNUA” means the Facilities and Network Use Agreement dated July 22, 2013, by and among the Company, ACS, GCI,ACS Wireless and GCI Wireless, as amended and as modified by that certain Side Letter Agreement dated July 22, 2013 by andamong the Company, ACS, GCI, ACS Wireless and GCI Wireless.“FTC” has the meaning given such term in Section 7.10.“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America, appliedon a consistent basis, or, in the absence thereof, applicable accounting principles consistent with past practices.“GCI” has the meaning given such term in the Preamble.“GCI Parent” has the meaning given such term in the Preamble.“GCI Wireless” has the meaning given such term in the Preamble.“Governmental Authority” any government or any arbitrator, tribunal or court of competent jurisdiction, administrativeagency, board, department or commission, legislative body or other governmental authority or instrumentality (in each case whetherFederal, state, local,9BUS_RE/5486564.1foreign, international or multinational) or entity which lawfully assumes the powers and functions of the same (including any taxing orother revenue collecting authority or other body).“Governmental Consents” means those Consents of Governmental Authorities required for the Transactions that are listed inSchedule 4.5 as “Governmental Consents.”“Hazardous Substance” means any pollutant, contaminant, hazardous or toxic substance, material, constituent or waste that isdefined, labeled or regulated as such by any Governmental Authority, or for which liability or standards of care are imposed, pursuantto an Environmental Law and includes asbestos and asbestos-containing materials and any material or substance that is: (a) designatedas a “hazardous substance” pursuant to 33 U.S.C. § 1317; (b) defined as a “hazardous waste” pursuant to 42 U.S.C. § 6903;(c) defined as a “hazardous substance” pursuant to Section 101 of CERCLA; or (d) is so designated or defined under any otherapplicable Legal Requirements.“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.“Indemnifier” has the meaning given such term in Section 11.2.“Independent Accountant” has the meaning given such term in Section 2.3(h)(iii).“Information” has the meaning given such term in Section 7.9.“Information Protection Terms” means the confidentiality procedures as mutually agreed to by ACS and GCI to preventdisclosure to unauthorized persons prior to Closing.“Instrument of Assignment” means the Instrument of Assignment substantially in the form of Exhibit A.“Instrument of Assumption” means the Instrument of Assumption substantially in the form of Exhibit B.“Intellectual Property” means all rights and privileges relating to intellectual property, whether arising under United States,multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, patent applications,proprietary information, know how and processes of a member of the ACS Group and used in the conduct of the ACS WirelessActivities, other than trademarks and service marks of ACS.“Internal Subscriber” means any Person who receives Wireless services through the ACS Group, and has no paymentobligations with respect to such authorized services, (a) who is a director, officer, employee or consultant of a member of the ACSGroup or any of its Affiliates, (b) for demonstration purposes in the ACS Group’s (or its Affiliates’) retail stores or (c) for other internaluses or purposes of the ACS Group or its Affiliates.“IP License Agreements” means the Trademark License Agreement and the License Agreement substantially in the formsattached as Exhibit J.“IRU” means an indefeasible right of use.10BUS_RE/5486564.1“Knowledge” when used with respect to (i) ACS, means the actual knowledge of any fact, circumstance or condition of thoseofficers of ACS set forth on Exhibit D and (ii) GCI, means the actual knowledge of any fact, circumstance or condition of thoseofficers of GCI Parent set forth on Exhibit E, and, in each case, the knowledge that such officers would have had if such officers hadconducted a reasonable inquiry.“Leased Property” means, to the extent constituting real property, all the buildings, fixtures, other improvements, leaseholdinterests, easements, licenses, rights to access, right-of-way and other real property interests which are leased by a member of the ACSGroup and used in the conduct of the ACS Wireless Activities at the sites of the Offered Leases, in each case other than any ExcludedAssets.“Leased Property Schedule” means the separate Leased Property Schedule heretofore agreed to by ACS and GCI.“Leases” means all leases for retail stores used in the conduct of the ACS Wireless Activities to which a member of the ACSGroup is a party.“Legal Requirements” means applicable common law and any applicable statute, ordinance, code or other law, rule,regulation, order, technical or other standard, requirement or procedure enacted, adopted, promulgated or applied by any GovernmentalAuthority, including any applicable order, decree or judgment which may have been handed down, adopted or imposed by anyGovernmental Authority.“Licenses” means all domestic wireless, business radio and other FCC licenses, and any pending applications therefor grantedto a member of the ACS Group by the FCC in connection with the ACS Assets or the ACS Wireless Activities, and all other licenses,certifications, registrations, authorizations and permits and any pending applications therefor, issued to such Person or any of itsAffiliates by any Governmental Authority that are used in the conduct of the ACS Wireless Activities, other than, in each case, FCClicenses and other licenses, authorizations and permits and any pending applications therefor related to IRU or capacity purchases.“Liens” means all claims, charges, restrictions, mortgages, pledges, security interests, liens or other encumbrances of any naturewhatsoever (whether absolute, accrued, contingent or otherwise).“Lifeline Subscribers” means Wireless subscribers receiving service from ACS or its Affiliates under ACS’s Lifeline WirelessPhone program.“M2M Connections” means machine to machine connections for which ACS provides Wireless services, including OnStarand ProCon connections.“Material Consents” means the Consents designated in Schedule 4.5 as “Material Consents.”“Network Information” means that information listed in Schedule 9.2.11BUS_RE/5486564.1“Non-Election Notice” has the meaning given such term in Section 7.8(a).“Nonqualifying Subscribers” means, for purposes of determining the Subscriber Adjustment, each of the following: (a) anySubscriber any portion of whose Wireless account has been outstanding more than 60 days from date of billing as of the date ofdetermination; (b) any Lifeline Subscriber who has not been certified or recertified in 2014; (c) any Prepaid Subscriber who has not,within 60 days before the date of determination of the number of Actual Prepaid Subscribers (i) had voice or data usage or (ii) addedmoney to such Prepaid Subscriber’s account balance; (d) OnStar Subscribers; and (e) Subscribers for which (i) Consent is required totransfer and assign its Subscriber Contract and (ii) such Consent is not obtained, and, if such Subscriber Contract is listed on theSubscriber Contract Consent List, GCI has delivered a Non-Election Notice with respect to such Subscriber Contract pursuant toSection 7.8(a).“Offered Leases” means those leases listed in the Leased Property Schedule.“Omnibus Amendment Agreement” means the Omnibus Amendment Agreement substantially in the form of Exhibit K.“OnStar Subscribers” means customers in the State of Alaska subscribing to the OnStar service that are provided Wirelessservice by the ACS Group, whether directly or through a contract with Verizon.“Operating Agreement” means the First Amended and Restated Operating Agreement of the Company dated July 22, 2013,by ACS, ACS Wireless, GCI Parent, GCI Wireless and the Company, as amended as of the date hereof.“Outside Date” has the meaning given such term in Section 10.1(d).“Parent” means either ACS or GCI Parent as the context requires and references to the other Parent mean, with respect toACS, ACS Wireless or ACS Group, GCI Parent, and with respect to GCI, GCI Parent or GCI Wireless, ACS.“Parties” means ACS, ACS Wireless, GCI, GCI Wireless and the Company and a “Party” means any such Person.“Permitted Liens” means:(a) Liens for Taxes not yet due and payable;(b) Mechanics’, carriers’, workmen’s, warehousemen’s, landlord’s, repairmen’s or other like Liens arising or incurredin the ordinary course of business consistent with past practice that secure obligations not yet due;(c) (A) easements, rights of way, zoning ordinances, building and other similar restrictions of record and Liensaffecting Leased Property and any conditions that may be shown by a current, accurate survey or physical inspection made before theClosing, (B) Liens that have been placed by any developer, landlord or other Third Party on property over which easement rights12BUS_RE/5486564.1have been granted or on any Leased Property and subordination or similar agreements relating thereto and (C) unrecorded easements,covenants, rights of way and other similar restrictions, in each case that are not, individually or in the aggregate, material to the ACSWireless Activities or the ACS Assets, which do not prohibit or interfere with the current operation of any Leased Property;(d) Deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds,performance bonds and other obligations of a like nature, in each case in the ordinary course of business to the extent such depositsconstitute ACS Assets;(e) Pledges and deposits made in the ordinary course of business in compliance with any Legal Requirements andLiens arising by statute in connection with worker’s compensation, unemployment insurance, old age benefits, social securityobligations, taxes, assessments, statutory obligations or other similar charges, good faith cash deposits in connection with tenders,contracts or leases to which such Person is a party or other cash deposits in any such foregoing case that is required to be made in theordinary course of business, provided in each case that the obligation is not for borrowed money and that the obligation secured is notoverdue or, if overdue, is being contested in good faith by appropriate proceedings which prevent enforcement of the matter undercontest and adequate reserves have been established therefor;(f) Imperfections of title or encumbrances that, individually or in the aggregate, do not impair materially, and wouldnot reasonably be expected to impair materially, the continued use and operation of the ACS Assets to which they relate in the conductof the ACS Wireless Activities in substantially the manner as presently conducted;(g) With respect to the ACS AWN Interest, all restrictions, obligations and liabilities with respect thereto set forth inthe Operating Agreement; and(h) Existing third party IRUs listed on Schedule 1.1(b).“Person” means any natural person, corporation, general or limited partnership, limited liability company, joint venture, trust,association, unincorporated entity of any kind, or a Governmental Authority.“Post-Close Systems” has the meaning given such term in Exhibit A to the A&R ACS Services Agreement.“Post-Closing Adjustment” has the meaning given such term in Section 2.3(g).“Postpaid Subscribers” means all subscribers of the ACS Group with respect to ACS Wireless Activities in the State ofAlaska (which for the avoidance of doubt includes Lifeline Subscribers and M2M Connections) other than Prepaid Subscribers.“Prepaid Subscribers” means all subscribers purchasing or receiving prepaid Wireless services from the ACS Group, asdetermined in accordance with past practices of ACS for public reporting purposes, consistently applied.13BUS_RE/5486564.1“Proceeding” means any suit, action, proceeding, arbitration, audit, hearing, or investigation (in each case, whether civil,criminal, administrative, investigative, or informal) commenced, brought, conducted or heard by or before, or otherwise involving, anyGovernmental Authority.“Provider” has the meaning given such term in Section 7.9.“Purchase Price” has the meaning given such term in Section 2.2.“RCA” means the Regulatory Commission of Alaska.“Receiver” has the meaning given such term in Section 7.9.“Resolution Period” has the meaning given such term in Section 2.3(h)(ii).“Restricted Wireless Business” means the business of (a) engineering, operating and maintaining competitive Wirelessnetwork(s) in the State of Alaska, and (b) providing Wireless products (including Wireless devices) and services in the State of Alaskaon any basis (retail or wholesale), including entering into Wireless roaming agreements. The Restricted Wireless Business does notinclude (i) Fixed Wireless Replacement Services, whether provided pursuant to the Telular Agreement or otherwise, regardless of whoprovides such services, (ii) WiFi, (iii) Wireless Internet service provider (WISP) services, (iv) commercial services provided by ACS tocustomers under Excluded Business Customer Contracts, to the extent and for the period that ACS is permitted to retain suchcustomers, (v) engineering, providing or maintaining competitive Wireless backhaul and transport services for the benefit of Wirelesscarriers serving the Alaska market or (vi) providing competitive cell site leases.“Review Period” has the meaning given such term in Section 2.3(h)(i).“SEC” means the U.S. Securities and Exchange Commission.“Securities Act” means the Securities Act of 1933, as amended.“Sherman Act” means title 15 of the United States Code §§ 1-7.“Signing Date” has the meaning given such term in the Preamble.“Specified Consents” means the Consents set forth on Schedule 1.1(a).“Statement of Estimates” has the meaning given such term in Section 2.3(e).“Statement of Objections” has the meaning given such term in Section 2.3(h)(ii).“Subscriber Adjustment” means an amount (if any) equal to the sum of (i)(A) $350 multiplied by (B) the absolute differencebetween (1) the Actual Postpaid Subscriber Count and (2) the Baseline Postpaid Subscriber Count, but only if (1) minus (2) is anegative number and, if such amount is a positive number, then it shall be deemed to be zero, and (ii)(A) $175 multiplied by (B)14BUS_RE/5486564.1the difference between (1) the Actual Prepaid Subscriber Count and (2) the Baseline Prepaid Subscriber Count, but only if (1) minus(2) is a negative number and if such amount is a positive number, then it shall be deemed to be zero.“Subscriber Adjustment Conditions” means all conditions to the obligations of GCI and GCI Wireless at the Closing underSection 8.2 (other than Sections 8.2(f), (h), (j), (l), (m) and (n)), and the condition to the obligations of ACS and ACS Wireless that theSpecified Consents shall have been obtained, provided that delivery of a certificate attesting to any such conditions or delivery ofexecuted Ancillary Agreements required pursuant to Section 8.2 shall not be required to be delivered so long as ACS stands willingand able to make such deliveries.“Subscriber Contract Consent List” has the meaning given such term in Section 7.8(a).“Subscriber Contracts” means all Contracts for the provision of Wireless services to Subscribers, including agreementsrelated to the provision of Wireless services to M2M Connections.“Subscribers” means all active or suspended customers (commercial and consumer) of the ACS Group with respect to ACSWireless Activities in the State of Alaska, including Postpaid Subscribers and Prepaid Subscribers, but in no event including InternalSubscribers or Telular Subscribers.“Target Closing Date” means the date that is two months after the Signing Date.“Tax Benefit” has the meaning given such term in Section 11.6(b).“Tax Return” means, with respect to a Person, any federal, state, local or foreign tax return, report, declaration of estimatedTax payments, statement, information return or statement, or other similar filing, including any related or supporting information withrespect to any of the foregoing and any amendment thereof, filed or to be filed by such Person with any taxing authority in connectionwith the determination, assessment, collection or administration of any Taxes.“Tax Savings” has the meaning given such term in Section 11.6(b).“Taxes” means (a) all Federal, state, county, local, municipal, foreign and other taxes, assessments, duties fees, regulatoryimpositions, price support impositions or similar charges of any kind whatsoever, including all franchise, capital, income, sales, use,ad valorem, receipts, value added, profits, license, withholding, payroll, employment, excise, premium, property, customs, net worth,capital gains, transfer, stamp, documentary, social security, environmental, alternative minimum, occupation, recapture gross receipts,universal service, recovery and other taxes and levies, and including all interest, penalties and additions imposed with respect to suchamounts, and (b) any liability for any amounts described in clause (a) under Treasury Regulations Section 1.1502-6 (or any similarprovision of state, local, or foreign law), or as a transferee or co-vendor, agent, responsible person, by contract, by operation of law orotherwise.15BUS_RE/5486564.1“Telular Agreement” means the Fixed Wireless Replacement Services Agreement substantially in the form of Exhibit G.“Telular Subscribers” means customers purchasing only Fixed Wireless Replacement Services from any member of the ACSGroup and no other Wireless services.“Third Party” means any Person that is not a member of the ACS Group or any Affiliate thereof, the Company or anyAffiliate thereof, GCI or any Affiliate thereof, or an officer or director of any of the foregoing.“Transaction Opinion” means an opinion from a nationally recognized valuation or investment banking firm approved byGCI Parent in its reasonable discretion, addressed to GCI Parent opining that the Purchase Price to be paid for the consideration for theACS Assets and the ACS AWN Interest represents at least reasonably equivalent value for such assets, as of the Closing Date.“Transactions” means the transactions contemplated by this Agreement and the Ancillary Agreements.“Transition Completion Date” means the date on which the Transition Completion (as defined in the Transition SupportAgreement) occurs.“Transition Contracts” means the Movius Contract and the R.I.M./Blackberry Contract.“Transition Services Agreement” means the Transition Services Agreement substantially in the form attached as Exhibit I.“Transition Support Agreement” means the Transition Support and Pre-Closing Confidentiality Agreement.“Treasury Regulations” means the Treasury regulations promulgated under the Code.“Undisputed Amounts” has the meaning given such term in Section 2.3(h)(iii).“Union” has the meaning given such term in Section 4.11.“USAC” means the Universal Service Administrative Company.“WARN Act” has the meaning given such term in Section 7.5(c).“WiFi” means any wireless local area network technology that is based on the Institute of Electrical and Electronics Engineers’(IEEE) 8.02.11 standards.“Wireless” means (a) Commercial Mobile Radio Services (as defined by the Communications Act and the rules andregulations thereunder), (b) WiFi and (c) any additional mobile voice, text messaging and data products and services provided overwireless spectrum16BUS_RE/5486564.1licensed or authorized for use by the FCC other than, in the case of clause (c), any such products or services provided by satellitedirectly to Wireless devices.“2012 Purchase and Contribution Agreement” means the Asset Purchase and Contribution Agreement dated as of June 4,2012 by and among ACS, ACS Wireless, GCI Parent, GCI Wireless and the Company.1.2 Clarifications. Words used in this Agreement, regardless of the gender and number specifically used, shall be deemed andconstrued to include any other gender and any other number as the context requires. As used in this Agreement, the word “including”shall be deemed to be followed by the words “without limiting the generality of the foregoing”, and the word “or” has the inclusivemeaning of “and/or”. Except as specifically otherwise provided in this Agreement in a particular instance, a reference to a Section,Exhibit or Schedule is a reference to a Section of this Agreement or an Exhibit or Schedule hereto, and the terms “hereof,” “herein,”and other like terms refer to this Agreement as a whole, including the Exhibits and Schedules to this Agreement, and not solely to anyparticular part of this Agreement. The descriptive headings in this Agreement are inserted for convenience of reference only and arenot intended to be part of or to affect the meaning or interpretation of this Agreement. This Agreement shall be construed withoutregard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing anyinstrument to be drafted.SECTION 2.AGREEMENT TO PURCHASE AND SELL; PURCHASE PRICE2.1 Purchase and Sale of Assets.(a) [Intentionally Omitted](b) Subject to the terms and conditions set forth in this Agreement, at the Closing or, with respect to the TransitionContracts, on the Transition Completion Date and, with respect to the Assumed Leases, on the Assumed Leases Assumption Date,ACS shall cause one or more applicable members of the ACS Group to sell, assign, transfer, convey and deliver to GCI or an Affiliateof GCI designated by GCI, and GCI and any such Affiliate shall purchase from such members of the ACS Group, the ACS Assets,free and clear of any Liens (except for Permitted Liens), and without the creation of any successor or derivative liability by operation oflaw or otherwise, such sale, assignment, transfer conveyance and delivery to be effected by execution and delivery of the Instrument ofAssignment. The ACS Assets are the following:(i) ACS Subscriber Assets:(1) All Assumed Contracts not included in the CDMA Core Assets, including any deposits orprepayments made thereunder;(2) All Accounts Receivable (for the avoidance of doubt, whether or not constituting Eligible AccountsReceivable);17BUS_RE/5486564.1(3) Proprietary training materials primarily used in connection with the ACS Wireless Activities;(4) All Leased Property leased pursuant to the Assumed Leases; and(5) The Operating Company Number (OCN) 6304 assigned by NECA to ACS Wireless.(ii) ACS Network Assets:(1) All Drop Circuits;(2) The CDMA Core Assets;(3) The Network Information; and(4) The Dedicated Microwave Circuits, other than Dedicated Microwave Circuits that were transferredto the Company pursuant to the 2012 Purchase and Contribution Agreement.(iii) Originals or, if such originals are not available, copies of all Tax Returns regarding personal property andad valorem Taxes imposed on the ACS Assets, to the extent each relates solely to the ACS Assets; provided, however, that the ACSGroup may retain copies of any such Tax Returns; and(iv) All books and records relating to the ACS Assets (except as expressly excluded by Section 2.4(e)),including executed copies of the Assumed Contracts, all Subscriber information, and all filings or records required to be kept by theFCC; provided, however, that the ACS Group may retain copies of any such books, records, Contracts and filings and such books,records, Contracts and filings shall constitute Information provided by GCI to ACS that is not previously known by, or in thepossession of, the ACS Group and is subject to the obligation to keep such Information confidential in the manner and to the extent setforth in the Confidentiality Agreement, provided that the obligation to keep such Information confidential shall be extended to the datethat is five years after the Signing Date.(c) Subject to the terms and conditions set forth in this Agreement, at the Closing, ACS Wireless shall sell, assign,transfer, convey and deliver to GCI Wireless, and GCI Wireless shall purchase from ACS Wireless, the ACS AWN Interest, free andclear of any Liens (except for Permitted Liens described in clause (g) of the definitions of Permitted Liens), such sale, assignment,transfer, conveyance and delivery to be effected by the execution and delivery of the Assignment of Ownership Interest.2.2 Purchase Price. The aggregate purchase price for the ACS Assets and the ACS AWN Interest shall be $300 million (the“Base Purchase Price”), subject to adjustment as provided in Section 2.3 (as so adjusted, the “Purchase Price”). GCI or GCIWireless shall pay, and GCI Parent18BUS_RE/5486564.1shall cause GCI and GCI Wireless to pay, the Purchase Price, without any deduction or withholding except as expressly permitted bythis Agreement, as follows:(a) $9 million of the Purchase Price (the “Escrow Amount”) shall be paid at Closing to the Escrow Agent to be heldin escrow pursuant to the terms and conditions of the Escrow Agreement;(b) $3 million of the Purchase Price (the “Deferred Payment Amount”) shall be paid to the ACS Group uponsatisfaction by ACS of the delivery requirements set forth in Section 7.17;(c) the balance of the Purchase Price (estimated as of the Closing Date as provided in Section 2.3) less the sum of theEscrow Amount and the Deferred Payment Amount shall be paid to the ACS Group on the Closing Date;in the case of (b) and (c) by wire transfer of immediately available funds to an account or accounts designated by ACS no later thanthree Business Days prior to the Closing Date. The recipient or recipients of the Purchase Price designated by ACS shall be deemed tohave received the Purchase Price on behalf of the selling members of the ACS Group in accordance with the Allocation Schedule.2.3 Purchase Price Adjustments and Special Distribution. The Base Purchase Price shall be subject to adjustment inaccordance with the following provisions of this Section 2.3:(a) The Base Purchase Price shall be decreased by an amount equal to $2.4 million multiplied by the number ofmonths (including partial months) during the period beginning on January 1, 2015 and ending on the Closing Date in which theCompany makes interim monthly or quarterly Distributions to ACS Wireless in accordance with Section 5.5 of the OperatingAgreement (the date of any such distribution, the “Distribution Date”); provided, however, that if the Closing has not occurred on orbefore the Target Closing Date and all ACS Closing Requirements have been satisfied or waived on or before the Target ClosingDate, then the Base Purchase Price shall be decreased by an amount equal to $1.2 million (rather than $2.4 million) multiplied by thenumber of months (including partial months) during the period beginning on the Target Closing Date and ending on the Closing Datein which the Company makes Distributions to ACS Wireless as described in the preceding provisions of this sentence. For theavoidance of doubt, the first month in the period specified in the preceding sentence will be January 2015 if the Company makes aDistribution to ACS Wireless during such month that relates to the prior month (i.e., December 2014).(b) If the Closing Date occurs on a day after the Distribution Date in January 2015, ACS Wireless shall receive, fromthe Company immediately prior to the Closing, a special Distribution from the Company in an amount equal to the product of (i) thenumber of days between the most recent Distribution Date and the Closing Date (including the Closing Date but not including the mostrecent Distribution Date), (ii) .0333 and (iii) $1.766 million; and the amount of such Distribution pursuant to this Section 2.3(b) shall inno event exceed $1.766 million. For the avoidance of doubt, the amount of such Distribution pursuant to this Section 2.3(b) resets to $-0- on each Distribution Date. For the avoidance of doubt, the Distribution provided for under this19BUS_RE/5486564.1Section 2.3(b) will not be considered an adjustment to the Base Purchase Price. Subject to the foregoing, the Company agrees that itwill not make a Distribution prior to the date that such Distribution is required to be made pursuant to the provisions of the OperatingAgreement.(c) The Base Purchase Price shall be decreased by the amount of the Estimated Subscriber Adjustment.(d) The Base Purchase Price shall be (i) increased by the amount of Estimated Eligible Accounts Receivable and (ii)decreased by the sum of the amounts of the Estimated AWN Account Payable and the Estimated Assumed Subscriber Liabilities.(e) At least two Business Days before the Closing Date, ACS shall prepare and deliver to GCI a statement (the“Statement of Estimates”) setting forth its good faith estimate of:(i) the Subscriber Adjustment estimated as of the Closing Date or such other applicable date as provided in thedefinition of Subscriber Adjustment (the “Estimated Subscriber Adjustment”), which statement shall contain a calculation of theEstimated Subscriber Adjustment and a detailed report showing the Actual Postpaid Subscriber Count and the Actual PrepaidSubscriber Count, and a certificate of a financial officer of ACS that the Estimated Subscriber Adjustment was prepared in accordancewith any applicable past practices of ACS for public reporting purposes, using the same methods, practices, principles, policies andprocedures, with consistent classifications, judgments and methodologies;(ii) Eligible Accounts Receivable estimated as of the Closing Date (the “Estimated Eligible AccountsReceivable”), which statement shall contain a calculation of Estimated Eligible Accounts Receivable and accounts receivable agingdetail for each account, and a certificate of a financial officer of ACS that the Estimated Eligible Accounts Receivable was prepared inaccordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistentclassifications, judgments and valuation and estimation methodologies that were used in the preparation of the audited financialstatements of ACS for the most recent fiscal year end;(iii) the Assumed Subscriber Liabilities estimated as of the Closing Date (the “Estimated AssumedSubscriber Liabilities”), which statement shall contain a calculation of Estimated Assumed Subscriber Liabilities and a reportshowing the amount of deferred revenue derived from the financial reporting system with sufficient detail to establish the allocation ofsuch deferred revenue and its appropriate Subscribers, and a certificate of a financial officer of ACS that the Estimated AssumedSubscriber Liabilities was prepared in accordance with GAAP applied using the same accounting methods, practices, principles,policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in thepreparation of the audited financial statements of ACS for the most recent fiscal year end; and(iv) the AWN Account Payable estimated as of the Closing Date (the “Estimated AWN Account Payable”),which statement shall contain a calculation of Estimated AWN Account Payable and a detailed report showing the amount of retailrevenue for traditional postpaid plans and services for the relevant periods and such details and such other information as20BUS_RE/5486564.1is required under the FNUA with respect to postpaid and other plan fees and charges, and a certificate of a financial officer of ACSthat the Estimated AWN Account Payable was prepared in accordance with GAAP applied using the same accounting methods,practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologiesthat were used in the preparation of the audited financial statements of ACS for the most recent fiscal year end.(f) If, within 60 days after the Closing Date, GCI gives written notice to ACS that it accepts the calculations ofEstimated Eligible Accounts Receivable, Estimated Assumed Subscriber Liabilities, Estimated AWN Account Payable or EstimatedSubscriber Adjustment as set forth in the Statement of Estimates (or fails to provide ACS with written notice within such 60 day periodthat it does not accept any calculation set forth in the Statement of Estimates), then such calculations shall be accepted and agreed in theform delivered in the Statement of Estimates and no Post-Closing Adjustment shall be made with respect to the Estimated EligibleAccounts Receivable, Estimated Assumed Subscriber Liabilities, Estimated AWN Account Payable or Estimated SubscriberAdjustment, as the case may be. If GCI does not accept the Statement of Estimates with respect to one or more of the EstimatedEligible Accounts Receivable, Estimated Assumed Subscriber Liabilities, Estimated AWN Account Payable or Estimated SubscriberAdjustment, then within 60 days after the Closing Date, GCI shall prepare and deliver to ACS a statement setting forth its calculationof the Purchase Price adjustments not accepted by GCI (the “Closing Calculation Statement”) which statement shall contain the samedetails as required in Sections 2.3(e)(i), (ii), (iii) and (iv) and a certificate of an authorized officer of GCI Parent that the applicablecalculations were prepared in accordance with GAAP (to the extent applicable) applied using the same accounting methods, practices,principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that wereused in the preparation of the audited financial statements of ACS for the most recent fiscal year end. During this 60 day period, GCIshall have full access to the books and records of ACS and its Affiliates, the personnel of, and work papers prepared by, ACS, itsAffiliates and/or their respective accountants to the extent that they relate to the calculation of the Estimated Subscriber Adjustment,Estimated Eligible Accounts Receivable, Estimated Assumed Subscriber Liabilities or the Estimated AWN Account Payable and tosuch historical financial information (to the extent in such Person’s possession) relating to such calculations as GCI may reasonablyrequest (at reasonable times) for the purpose of reviewing the calculations and to prepare the Closing Calculation Statement; provided,however, that such access shall be in a manner that does not interfere with the normal business operations of ACS or its Affiliates.(g) Subject to Section 2.3(h), if (i) the Purchase Price as adjusted to account for the amount of the EstimatedSubscriber Adjustment, Estimated Eligible Accounts Receivable, the Estimated Assumed Subscriber Liabilities and the EstimatedAWN Account Payable exceeds (ii) the Purchase Price as adjusted to account for the amounts of the Subscriber Adjustment, EligibleAccounts Receivable, Assumed Subscriber Liabilities and AWN Account Payable accepted by GCI or set forth in the ClosingCalculation Statement, as applicable, then ACS shall pay to GCI an amount equal to such excess. If (i) the Purchase Price as adjustedto account for the amounts of the Subscriber Adjustment, Eligible Accounts Receivable, Assumed Subscriber Liabilities and AWNAccount Payable accepted by GCI or set forth in the Closing Calculation Statement, as applicable,21BUS_RE/5486564.1exceeds (ii) the Purchase Price as adjusted to account for the amount of the Estimated Subscriber Adjustment, Estimated EligibleAccounts Receivable, Estimated Assumed Subscriber Liabilities and Estimated AWN Account Payables, then GCI shall pay to ACSan amount equal to such excess. The amount payable pursuant to this Section 2.3(g) is referred to as the “Post-Closing Adjustment”.(h) (i) Examination. After receipt of the Closing Calculation Statement, ACS shall have 30 days (the “ReviewPeriod”) to review the Closing Calculation Statement. During the Review Period, ACS shall have full access to the books and recordsof GCI, the personnel of, and work papers prepared by, GCI, its Affiliates and/or their respective accountants to the extent that theyrelate to the Closing Calculation Statement and to such historical financial information (to the extent in such Person’s possession)relating to the Closing Calculation Statement as ACS may reasonably request (at reasonable times) for the purpose of reviewing theClosing Calculation Statement and to prepare a Statement of Objections (defined below), provided, however, that such access shall bein a manner that does not interfere with the normal business operations of GCI or its Affiliates.(ii) Objection. On or prior to the last day of the Review Period, ACS may object to the Closing CalculationStatement by delivering to GCI a written statement setting forth objections of ACS in reasonable detail, indicating each disputed itemor amount and the basis for ACS’s disagreement therewith (the “Statement of Objections”). If ACS fails to deliver the Statement ofObjections before the expiration of the Review Period, the Closing Calculation Statement and the Post-Closing Adjustment, as the casemay be, shall be deemed to have been accepted by ACS. If ACS delivers the Statement of Objections before the expiration of theReview Period, GCI and ACS shall negotiate in good faith to resolve such objections within 30 days after the delivery of the Statementof Objections (the “Resolution Period”), and, if the same are so resolved within the Resolution Period, the Post-Closing Adjustmentand the Closing Calculation Statement with such changes as may have been previously agreed in writing by GCI and ACS, shall befinal and binding.(iii) Resolution of Disputes. If ACS and GCI fail to reach an agreement with respect to all of the matters setforth in the Statement of Objections before expiration of the Resolution Period (any amounts remaining in dispute, “DisputedAmounts” and any amounts not so disputed, the “Undisputed Amounts”), then GCI and ACS shall appoint by mutual agreement theoffice of an impartial nationally recognized firm of independent certified public accountants other than GCI’s accountants or ACS’saccountants (the “Independent Accountant”) who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only andmake any adjustments to the Post-Closing Adjustment. If GCI and ACS are unable to so select the Independent Accountant within 20days after the end of the Resolution Period, the American Arbitration Association shall make such selection. The Parties agree that alladjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under disputeby the Parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in theClosing Calculation Statement and the Statement of Objections, respectively.(iv) Fees of the Independent Accountant. The fees and expenses of the Independent Accountant shall be paidby ACS, on the one hand, and by GCI, on the other hand,22BUS_RE/5486564.1based upon the percentage that the amount actually contested but not awarded to ACS or GCI, respectively, bears to the aggregateamount actually contested by ACS and GCI.(v) Determination by Independent Accountant. The Independent Accountant shall make a determination assoon as practicable within 30 days (or such other time as the Parties shall agree in writing) after their engagement, and their resolutionof the Disputed Amounts and their adjustments to the Closing Calculation Statement shall be conclusive and binding upon the Parties.(vi) Payments of Post-Closing Adjustment. Except as otherwise provided herein, any payment of the amountsset forth in Section 2.3(g) in respect of the Post-Closing Adjustment, together with interest calculated as set forth below, shall (A) bedue (x) within ten Business Days of acceptance of the applicable Closing Calculation Statement or (y) if there are Disputed Amounts,then, with respect to any Undisputed Amounts, within ten Business Days of the agreement with respect to such Undisputed Amountsand, with respect to Disputed Amounts, within ten Business Days of the resolution described in clause (v) above; and (B) be paid bywire transfer of immediately available funds to such account as is directed by GCI or ACS, as the case may be. The Post-ClosingAdjustment shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to10%. Such interest shall be calculated daily on the basis of a 365 day year and the actual number of days elapsed.(i) For purposes of this Section 2.3, the methods, practices, principles, policies and procedures for the calculation ofamounts pursuant to this Section 2.3 shall be as set forth on Schedule 2.3 for the respective Purchase Price adjustment as specified onsuch Schedule.2.4 Excluded Assets. The ACS Assets being sold hereunder shall exclude the following assets:(a) Each member of the ACS Group’s cash on hand as of the Closing Date and all other cash and cash equivalents inany member of the ACS Group’s bank, savings or other depository accounts; any and all letters of credit or other similar items; and anystocks, bonds, certificates of deposit and similar investments;(b) Any Contracts other than the Assumed Contracts, including the Excluded Business Customer Contracts as set forthon Schedule 2.4;(c) Any Contract for which a Non-Election Notice is delivered by GCI pursuant to Section 7.8(a);(d) Any handset and accessory inventory, except as otherwise provided in any Ancillary Agreement;(e) Any books and records that ACS is required by any Legal Requirement to retain (subject to the right of GCI toaccess and to copy for a period of three years after the Closing Date), and the corporate minute books and other books and recordsrelated to internal corporate matters of any member of the ACS Group;23BUS_RE/5486564.1(f) Any claims, rights and interest in and to any refunds of federal, state or local income or other Taxes, fees orassessments for periods (or portions thereof) ending on or prior to the Closing Date or otherwise relating to the Excluded Assets,Excluded Liabilities or any other Tax for which ACS is liable pursuant to Section 7.3;(g) All judgments, choses in action or Proceedings of the ACS Group relating to the ownership or operation of theACS Assets or conduct of the ACS Wireless Activities prior to the Closing Date;(h) All Employee Plans, Compensation Arrangements and employment agreements of any member of the ACSGroup;(i) The account books of original entry, general ledgers, and financial records except to the extent specificallyidentified in Section 2.1(b)(iv);(j) Medical records and personnel records to the extent required by Legal Requirements;(k) Insurance policies and rights and claims thereunder;(l) All Tax Returns and all supporting documentation for such Tax Returns, except to the extent specifically identifiedin Section 2.1(b)(iii);(m) All Intellectual Property;(n) All right and assets (other than Drop Circuits) primarily used to provide wireline services;(o) All real property other than the Leased Property leased pursuant to the Assumed Leases;(p) All WiFi equipment and DSL routers;(q) All voicemail hardware and software other than Assumed Contracts;(r) All vehicles;(s) All office furniture, office fixtures, office appliances and office equipment other than the Leased Property leasedpursuant to the Assumed Leases;(t) All inventory other than inventory included in the CDMA Core Assets;(u) Any right or asset used by any member of the ACS Group to provide local exchange services under theCommunications Act;(v) Any right or asset used by any member of the ACS Group to provide any service under the Transition ServicesAgreement24BUS_RE/5486564.1(w) All assets located in the ACS Group’s (or its Affiliates’) retail stores that are not required, pursuant to theapplicable Lease, to remain in such stores upon the expiration or termination of such Lease; and(x) The assets set forth on Schedule 2.4.2.5 Assumed Liabilities. Upon the terms and subject to the conditions of this Agreement, GCI or GCI Wireless, as applicable,shall assume, effective as of the Closing or, with respect to the Transition Contracts, on the Transition Completion Date and, withrespect to the Assumed Leases, on the Assumed Leases Assumption Date, and from and after the Closing, the Transition CompletionDate or the Assumed Leases Assumption Date, as applicable, GCI or GCI Wireless, as applicable, shall pay, perform and dischargewhen due, all the following liabilities, obligations and commitments of the ACS Group (the “Assumed Liabilities”), such assumptionto be evidenced where appropriate by execution and delivery of an Instrument of Assumption, other than any Excluded Liabilities:(a) All liabilities, obligations and commitments under the Assumed Contracts to the extent accruing and related to theperiod after Closing; and(b) All liabilities, obligations and commitments with respect to the ownership of the ACS AWN Interest to the extentaccruing and related to the period after Closing.2.6 Excluded Liabilities. Neither GCI nor GCI Wireless shall assume or be obligated to pay, perform or otherwise dischargeany liability or obligation of the ACS Group, whether direct or indirect, known or unknown, absolute or contingent, not expresslyassumed by GCI or GCI Wireless pursuant to Section 2.5 (all such liabilities and obligations not being assumed being herein called the“Excluded Liabilities”) and, notwithstanding anything to the contrary in Section 2.5 or by operation of law or otherwise, none of thefollowing shall be Assumed Liabilities for purposes of this Agreement:(a) Any liabilities in respect of Taxes for which any member of the ACS Group is liable for periods ending as of theeffectiveness of the Closing;(b) Any costs and expenses incurred by the ACS Group in connection with the Transactions, including in connectionwith its negotiation and preparation of this Agreement and the Ancillary Agreements and its performance and compliance with theagreements and conditions contained herein and therein;(c) Any liabilities, obligations or commitments in respect of any Excluded Assets;(d) Any liabilities, obligations or commitments in respect of any Proceedings to which the ACS Group is a party priorto the Closing;(e) Any liabilities, obligations or commitments in respect of employees of the ACS Wireless Activities;25BUS_RE/5486564.1(f) Any liabilities, obligations or commitments resulting from any Environmental Claims (regardless of whether anyrepresentation or warranty contained in Section 4.8 is incorrect) related to the ownership or operation of the ACS Assets related to theperiod prior to the Effective Time;(g) Any liabilities, obligations or commitments in respect of any universal service support received from the federal orAlaska Universal Service Funds with respect to ACS Wireless Activities prior to the Closing;(h) Any liabilities, obligations or commitments owed to or claimed by USAC or the FCC pursuant to the federalLifeline program with respect to ACS Wireless Activities prior to Closing or with respect to the obligation to report line counts andother information to USAC, including any forfeitures, fines or monetary judgments; and(i) Any liabilities, obligations or commitments resulting from any member of the ACS Group failing to comply withany Legal Requirements with respect to ACS Wireless Activities prior to Closing.SECTION 3.REPRESENTATIONS AND WARRANTIES REGARDING ACS AND ACS WIRELESSEach of ACS and ACS Wireless, jointly and severally, represents and warrants to GCI and GCI Wireless, as of the date hereofand as of the Closing Date except insofar as such representations and warranties are made as of the date hereof or any other specifieddate (in which case as of such date), as follows:3.1 Organization, Standing and Authority. Such Person is a corporation duly organized, validly existing and in good standingunder the laws of its jurisdiction of organization, and such Person is duly qualified to conduct business in all such foreign jurisdictionsin which such qualification is necessary for its conduct of the ACS Wireless Activities and to hold the ACS AWN Interest. SuchPerson and its Affiliates have all requisite power (i) to own, lease, and use the ACS Assets as presently owned, leased, and used, (ii) toconduct the ACS Wireless Activities as presently conducted, (iii) to hold the ACS AWN Interest, and (iv) to execute, deliver, andperform this Agreement and the documents contemplated hereby according to their respective terms. Neither such Person nor any of itsAffiliates is a participant in any joint venture or partnership with any other Person with respect to any part of the ACS WirelessActivities or the ACS Assets.3.2 Authorization and Binding Obligation. The execution, delivery and performance of this Agreement and the AncillaryAgreements by such Person have been duly authorized by all necessary corporate action on the part of such Person. No approval orconsent from any of its shareholders is required for such Person to execute, deliver or perform this Agreement or the AncillaryAgreements or to consummate the Transactions. This Agreement has been duly executed and delivered by such Person and constitutesits legal, valid, and binding obligation, enforceable against it in accordance with its terms, except to the extent such enforceability maybe limited by the Enforceability Exceptions.26BUS_RE/5486564.13.3 Absence of Conflicting Agreements. Subject to obtaining the Consents, the execution, delivery and performance of thisAgreement and the Ancillary Agreements (with or without the giving of notice, the lapse of time, or both): (i) does not require theconsent of any Person; (ii) will not conflict with any provision of the organizational documents of such Person; (iii) will not conflictwith, result in a breach of, or constitute a default under, any applicable Legal Requirements; (iv) will not conflict with, constitutegrounds for termination of, result in a breach of, constitute a default under, or accelerate or permit the acceleration of any performancerequired by the terms of, any material agreement, instrument, license or permit to which such Person is a party or by which such Personmay be bound; and (v) will not create any Lien upon the ACS Assets or the ACS AWN Interest.3.4 Claims and Legal Actions. Except as set forth in Schedule 3.4, there is no material Proceeding, or any order, decree orjudgment, in progress or pending, or to the Knowledge of such Person, threatened, against or relating to such Person or any of itsAffiliates relating to the ACS Assets, the ACS Wireless Activities or the ACS AWN Interest, or to such Person’s performance of itsobligations under this Agreement or the consummation of the Transactions. To the best of such Person’s Knowledge there are nopending written complaints by customers or other users of such Person’s or any of its Affiliates’ services that, individually or in theaggregate, would reasonably be expected to materially and adversely affect the ACS Assets, the financial condition of the ACSWireless Activities or the ACS AWN Interest. Other than requests described in Schedule 3.4, no written requests have been receivedby such Person or any of its Affiliates during the preceding two year period from the FCC, any state regulatory authority or otherGovernmental Authority or any other Person challenging or questioning the right of such Person or its Affiliates to conduct the ACSWireless Activities.3.5 Compliance with Laws. Except as set forth in Schedule 3.5, such Person and its Affiliates have complied with, and tosuch Person’s Knowledge, the ACS Wireless Activities and the ACS Assets are in compliance with, in all material respects, allapplicable Legal Requirements and such Person and its Affiliates have not received any notice of any claim that such Person or any ofits Affiliates is not in compliance with any applicable Legal Requirements, in each case, except where such noncompliance would notreasonably be expected to have a material impact, including the following Legal Requirements:(a) Communications Act. The Communications Act, including FCC filing requirements, notices to subscribers andFCC equal opportunity rules;(b) FCC Rules and Regulations. Rules and regulations of the FCC; and(c) RCA Rules and Regulations. Rules and regulations of the RCA.3.6 Solvency. After giving effect to the Transactions, such Person and each of its Affiliates that is transferring any of the ACSAssets or the ACS AWN Interest pursuant to this Agreement is solvent and each shall: (a) be able to pay its debts as they become due;(b) own property that has a fair saleable value greater than the amounts required to pay its debts (including a reasonable estimate of theamount of all contingent liabilities); and (c) have adequate capital to carry on its business. No transfer of property is being made and noobligation is being incurred in27BUS_RE/5486564.1connection with the Transactions with the intent to hinder, delay or defraud either present or future creditors of any such Person or anyof its Affiliates. In connection with the Transactions, neither such Person nor any of its Affiliates has incurred, or plans to incur, debtsbeyond its ability to pay as they become absolute and matured.SECTION 4.REPRESENTATIONS AND WARRANTIES REGARDING THE ACS ASSETS AND THE ACS AWNINTERESTEach of ACS and ACS Wireless, jointly and severally, represents and warrants to GCI and GCI Wireless with respect to theACS Wireless Activities, the ACS Assets and the ACS AWN Interest, as of the date hereof and as of the Closing Date (and to theextent related to the Transition Contracts, as of the Transition Completion Date, and to the extent related to the Assumed Leases or theLeased Property pursuant to any Assumed Leases, as of the Assumed Leases Assumption Date) except insofar as such representationsand warranties are made as of the date hereof or any other specified date (in which case as of such date), as follows:4.1 Sufficiency of Assets. Except as set forth in Schedule 4.1 and except for the Excluded Assets, the ACS Assets, togetherwith the ACS AWN Interest and the rights, assets and services made available pursuant to the Ancillary Agreements (i) constitute all ofthe assets, tangible and intangible, of any nature whatsoever, necessary to conduct the ACS Wireless Activities in substantially themanner presently operated by the ACS Group and (ii) include all of the assets of such Person and its Affiliates which are usedprimarily in the ACS Wireless Activities.4.2 Contracts.(a) ACS has delivered or provided to GCI copies of all material Contracts (other than Subscriber Contracts andContracts set forth on Schedule 4.1) required to enable the ACS Group to conduct the ACS Wireless Activities in all material respectsas presently conducted. True and complete copies of all Assumed Contracts (together with all amendments thereto) other thanSubscriber Contracts have been delivered to GCI. All Assumed Contracts are in full force and effect, and are in all material respectsvalid, binding and enforceable in accordance with their respective terms. None of the Assumed Contracts would be materiallybreached by virtue of the Transactions or by virtue of the assignments thereof to GCI or as otherwise contemplated by this Agreement;provided, however, that the Consents are obtained. Except as set forth in Schedule 4.2, there is not under any Assumed Contract anydefault by the ACS Group or any of its Affiliates or, to its Knowledge, any other party thereto, or any event which, after notice orlapse of time, or both, would constitute a material default which would give any party the right to terminate such Assumed Contract.Except as expressly set forth in Schedule 4.2, the ACS Group has not received any written notice of any intention by any party to anymaterial Assumed Contract (i) to amend the terms thereof in a manner that would materially and adversely affect the ACS Group’srights thereunder, or to terminate such Contract, (ii) to refuse to renew the same upon expiration of its term, or (iii) to renew the sameupon expiration only on terms and conditions which materially and adversely affect the ACS Group’s rights thereunder.(b) Except as set forth in Schedule 4.2, there are no Assumed Contracts in effect on the date hereof between the ACSGroup or any of its Affiliates and (i) any of its Affiliates, (ii) any28BUS_RE/5486564.1of its or its Affiliates’ officers, directors, shareholders, members, managers or “associates” (as defined in the Exchange Act), or (iii) anyAffiliate or “associate” (as defined in the Exchange Act) of any of the Persons listed in clause (ii).(c) ACS has delivered to GCI either the form of each type of, or the specific, Subscriber Contract (consumer andcommercial) in electronic or paper form other than those that were individually negotiated. Other than those Subscriber Contracts thatwere individually negotiated, all Subscriber Contracts conform to the specific Contract previously delivered to GCI or one of the typesof Contract forms previously delivered to GCI. All Subscriber Contracts that were individually negotiated are on terms that arecommercially reasonable in light of the practices in the industry at the time such contracts were entered into and such contracts do notcontain most favored nation provisions, restrictions on offerings or providing services to third parties, requirements of the serviceproviders to make capital expenditures, prepayments for services to be provided after the Closing Date (other than as reflected inAssumed Subscriber Liabilities) or termination or expiration dates later than December 31, 2019. The Subscriber Contracts wereentered into in the ordinary course of business. Upon assignment and transfer of the Subscriber Contracts to GCI under thisAgreement, GCI will have the right to receive all revenue, fees, and charges associated with the Wireless services provided pursuant tosuch Subscriber Contracts after Closing.4.3 Title to and Condition of Leased Property.(a) The Leased Property Schedule lists all Leases that ACS proposes to terminate or assign.(b) The ACS Group and its Affiliates have marketable title or leasehold interests, as the case may be, to all LeasedProperty free and clear of all Liens except for Liens set forth on the Leased Property Schedule and Permitted Liens.(c) All of such Leased Property (i) is in good condition and repair (ordinary wear and tear excepted), and (ii) subject toreceipt of the Consents and payment of any rent obligations in respect thereto that are not overdue, would be available for immediateuse by GCI for Wireless activities, as of the applicable transfer date. All Leased Property (i) has been maintained in a mannerconsistent with generally accepted industry standards, and (ii) permits the ACS Wireless Activities to operate in all material respects inaccordance with the terms of the Assumed Contracts and all applicable Legal Requirements as currently in effect.4.4 Intellectual Property. Other than (i) the Intellectual Property being provided pursuant to the Ancillary Agreements and (ii)any know-how, business processes and related tools (including models and spreadsheets), there is no Intellectual Property that anymember of the ACS Group uses in connection with the ACS Wireless Activities that is necessary to conduct the ACS WirelessActivities in substantially the manner presently operated by the ACS Group, other than Intellectual Property previously contributed toor otherwise acquired by the Company. To the Knowledge of ACS, the Intellectual Property licensed to GCI pursuant to the IPLicense Agreements, as currently used by ACS, does not infringe the Intellectual Property of any Third Party in any material respect.29BUS_RE/5486564.14.5 Consents. Except for the Consents described in Schedule 4.5, no Consent of, or filing with, any Governmental Authorityis required to permit any member of the ACS Group (i) to consummate this Agreement and the Transactions or (ii) to permit suchPerson to assign or transfer the ACS Assets and the ACS AWN Interest as contemplated hereby. Except for the Consents described inSchedule 4.5, no Consent with respect to an Assumed Contract (other than a Subscriber Contract) or a material Contract is required tobe obtained by any member of the ACS Group (i) to consummate this Agreement and the Transactions or (ii) to permit such Person toassign or transfer the ACS Assets and the ACS AWN Interest as contemplated hereby. For purposes of this Section 4.5, a materialSubscriber Contract shall mean a Subscriber Contract for more than 100 lines.4.6 Licenses and FCC Matters. Schedule 4.6 lists all of the material Licenses required to enable the ACS Group or itsAffiliates to carry on the ACS Wireless Activities as presently conducted. All material required reports of the ACS Group and itsAffiliates to the FCC or RCA, including those relating to Taxes administered by the FCC, are true and correct in all material respectsand have been duly filed. The ACS Group and its Affiliates have all of the material Licenses required under all applicable FCC RCArules, regulations and orders for the operations of the ACS Wireless Activities and to receive Universal Service Support, and arelicensed in all material respects to operate all of the ACS Wireless Activities required by Legal Requirements to be licensed.4.7 Insurance and Bonds. The ACS Wireless Activities and the ACS Assets are insured against claims, loss or damage inamounts set forth in Schedule 4.7. Schedule 4.7 provides a true and complete list of all surety and performance bonds or letters ofcredit maintained in connection with the ACS Wireless Activities.4.8 Environmental Law. Except as disclosed in Schedule 4.8, to the Knowledge of ACS (i) operations by the ACS Groupand its Affiliates with respect to the ACS Wireless Activities comply in all material respects with all applicable Environmental Laws;(ii) the ACS Group and its Affiliates have not used any Leased Property for, and have no Knowledge that such Leased Property haspreviously been used for, the manufacture, transportation, treatment, storage or disposal of Hazardous Substances except for such useof Hazardous Substances (for backup power and ordinary maintenance) customary in the construction, maintenance and operation ofthe ACS Assets and the ACS Wireless Activities and in amounts or under circumstances that would not reasonably be expected to giverise to any material liability for remediation; and (iii) such Leased Property complies in all material respects with all applicableEnvironmental Laws. Except as described in Schedule 4.8, to the Knowledge of ACS, no underground storage tanks have beeninstalled by or are used by the ACS Group or any of its Affiliates at any of its Leased Property. ACS has delivered to GCI true andcomplete copies of all environmental reports and studies in the possession of or reasonably available to ACS with respect to the LeasedProperty. The ACS Group and its Affiliates are not, to the Knowledge of ACS, the subject of (x) any “Superfund” evaluation orProceeding in connection with its Leased Property, (y) any Proceeding of any Governmental Authority evaluating whether anyremedial action is necessary to respond to any release of Hazardous Substances on or in connection with its Leased Property, or (z) anyEnvironmental Claim.4.9 Taxes and Tax Returns. All Tax Returns relating to the ACS Assets or the ACS Wireless Activities required to have beenfiled have been duly and timely filed with the appropriate30BUS_RE/5486564.1Governmental Authorities. All such Tax Returns are true, correct and complete in all material respects and properly reflect the liabilitiesfor Taxes for the periods, property or events covered thereby. All material Taxes due and payable with respect to the ACS Assets orthe ACS Wireless Activities have been timely and duly paid to the appropriate Governmental Authority.4.10 Conduct of Activities in Ordinary Course. Since December 31, 2013, through the date of this Agreement, the ACSGroup and its Affiliates have conducted the ACS Wireless Activities and owned and maintained the ACS Assets only in the ordinarycourse and have not:(a) Suffered any material adverse change in the ACS Wireless Activities, the ACS Assets or condition (financial orotherwise), including any damage, destruction or loss affecting the ACS Assets, other than any material adverse change resulting fromgeneral economic conditions, governmental regulations or otherwise affecting the Wireless services industry generally; or(b) Made any sale, assignment, lease or other transfer of any properties used in the ACS Wireless Activities other thanin the normal and usual course of business with suitable replacements being obtained therefor.4.11 Unions. Subject to obtaining the applicable Consent, the ACS Group and its Affiliates are not party to, bound by, ornegotiating any collective bargaining agreement or other contract with a union, works council or labor organization (collectively,“Union”) that would be binding upon GCI or any of its Affiliates, that would impose on GCI or any of its Affiliates any duty tobargain with any Union or that would impose any successor liability or obligation on GCI or any of its Affiliates or their property.4.12 Software and Hardware. All material third party software licenses and hardware used in the ACS Wireless Activities andincluded in the ACS Assets is currently supported by the vendor of such software licenses or hardware.4.13 ACS AWN Interest. ACS Wireless owns the ACS AWN Interest, free and clear of all Liens except for Liens set forth onSchedule 4.13 and Permitted Liens described in clause (g) of the definition of Permitted Liens. This Section 4.13 comprises the soleand exclusive representations and warranties of ACS and ACS Wireless relating to the ACS AWN Interest. For the avoidance ofdoubt, ACS and ACS Wireless make no representations or warranties relating to the assets, liabilities, business or operations of theCompany.4.14 Accounts Receivable. All Accounts Receivable represent fees or charges for sales actually made or services actuallyperformed in the ordinary course of business consistent with past practices, and all Eligible Accounts Receivable are legal, validlysubsisting and binding claims against the respective debtors as to which performance has been rendered. Unless paid, written off, orreserved against in the ordinary course of business consistent with past practice prior to the Closing Date, to the Knowledge of ACS,Eligible Accounts Receivable are collectible in the ordinary course of business consistent with past practice net of respective reservesagainst such Eligible Accounts Receivable, which such reserves are commercially reasonable and have been determined in accordancewith GAAP. Except to the extent reserved against, no counterclaims or offsetting31BUS_RE/5486564.1claims with respect to such Eligible Accounts Receivable are pending or, to the Knowledge of ACS, threatened.4.15 Drop Circuits. Schedule 4.15 lists all Drop Circuits that were granted as IRUs by ACS to AWN in the Contribution IRUAgreement or ordered subsequently by AWN under the Contribution IRU Agreement. The Drop Circuits (i) are to the Knowledge ofACS in good condition and repair (ordinary wear and tear excepted), and (ii) are, and have been, maintained in accordance withindustry standards.4.16 Dedicated Microwave Circuits. Schedule 4.16 lists all Dedicated Microwave Circuits. The Dedicated MicrowaveCircuits described in Section 2.1(b)(ii)(4) (i) are to the Knowledge of ACS in good condition and repair (ordinary wear and tearexcepted), and (ii) are, and have been, maintained in accordance with industry standards.4.17 IT Systems Architecture. ACS has delivered to GCI the diagrams and descriptions of ACS’s IT systems architectureused to conduct ACS Wireless Activities set forth on Schedule 4.17. The diagrams and descriptions are correct and complete andaccurately depict such network in all material respects.4.18 CDMA Core Assets. Except as set forth in Schedule 4.18 and except for the Excluded Assets, the CDMA Core Assets,when combined with the assets and rights previously transferred, assigned and granted to the Company and the rights, assets andservices made available pursuant to the Ancillary Agreements, and excluding assets and rights not dedicated to ACS WirelessActivities, constitute all Contracts, rights and property necessary for the Company to operate the CDMA Core in substantially themanner currently provided and operated.4.19 Full Disclosure. No representation or warranty made by ACS or ACS Wireless herein or in any certificate, document orother instrument furnished or to be furnished by such Person pursuant hereto contains or will contain any untrue statement of a materialfact, or omits or will omit to state any material fact known to such Person and required to make the statements herein or therein, in lightof the circumstances under which they were made, not misleading.SECTION 5.REPRESENTATIONS AND WARRANTIES OF GCI PARENT, GCI AND GCI WIRELESSEach of GCI Parent, GCI and GCI Wireless, jointly and severally, represents and warrants to ACS and ACS Wireless, as ofthe date hereof and as of the Closing Date except insofar as such representations and warranties are made as of the date hereof or anyother specified date (in which case as of such date), as follows:5.1 Organization, Standing and Authority. Such Person is a corporation or limited liability company duly organized, validlyexisting and in good standing under the laws of its jurisdiction of organization, and such Person is duly qualified to conduct business inall such foreign jurisdictions in which such qualification is necessary for its conduct of its respective business.32BUS_RE/5486564.15.2 Authorization and Binding Obligation. The execution, delivery and performance of this Agreement and the AncillaryAgreements by such Person have been duly authorized by all necessary corporate or limited liability company action on the part ofsuch Person. No approval or consent from any of its shareholders or members is required for such Person to execute, deliver orperform this Agreement or the Ancillary Agreements or to consummate the Transactions. This Agreement has been duly executed anddelivered by such Person and constitutes its legal, valid, and binding obligation, enforceable against it in accordance with its terms,except to the extent such enforceability may be limited by the Enforceability Exceptions.5.3 Absence of Conflicting Agreements. Subject to obtaining the Consents, the execution, delivery and performance of thisAgreement and the Ancillary Agreements (with or without the giving of notice, the lapse of time, or both): (i) does not require theconsent of any Person; (ii) will not conflict with any provision of the organizational documents of such Person; (iii) will not conflictwith, result in a breach of, or constitute a default under, any applicable Legal Requirements; and (iv) will not conflict with, constitutegrounds for termination of, result in a breach of, constitute a default under, or accelerate or permit the acceleration of any performancerequired by the terms of, any material agreement, instrument, license or permit to which such Person is a party or by which such Personmay be bound.5.4 Consents. Except as set forth in Schedule 5.4, no Consent of, or filing with, any Governmental Authority is required topermit GCI, GCI Wireless or GCI Parent to consummate this Agreement and the Transactions.5.5 Claims and Legal Actions. There is no Proceeding, or any order, decree or judgment, in progress or pending, or to theKnowledge of such Person, threatened, against or relating to such Person or any of its Affiliates relating to such Person’s performanceof its obligations under this Agreement or the consummation of the Transactions.5.6 Investment Intent. GCI Wireless is acquiring the ACS AWN Interest for investment purposes only, for its own account,not as a nominee or agent, and not with a view to the resale or distribution of any part thereof within the meaning of Section 2(11) ofthe Securities Act.5.7 Ability to Obtain Financing. As of the date hereof, none of GCI Parent, GCI and GCI Wireless have any reason to believethat the financing to fund the Purchase Price will not be available on commercially reasonable terms and conditions (or that GCI willnot be able to satisfy any conditions to such financing) such that the condition set forth in Section 8.2(m) will be satisfied on the TargetClosing Date or at such later time when the other conditions set forth in Section 8.2 have been satisfied or waived.5.8 Full Disclosure. No representation or warranty made by GCI or GCI Wireless herein or in any certificate, document orother instrument furnished or to be furnished by such Person pursuant hereto contains or will contain any untrue statement of a materialfact, or omits or will omit to state any material fact known to such Person and required to make the statements herein or therein, in lightof the circumstances under which they were made, not misleading.SECTION 6.COVENANTS33BUS_RE/5486564.16.1 Pre-Closing Covenants. Unless ACS shall have obtained the prior written consent of GCI Parent, between the date hereofand the Closing Date (or the Transition Completion Date with respect to the Transition Contracts or the Assumed Leases AssumptionDate with respect to the Assumed Leases and the Leased Property pursuant to any Assumed Leases), each of ACS and ACS Wirelessshall conduct, and shall cause its Affiliates to conduct, the ACS Wireless Activities in the ordinary course of business in accordancewith its past practices (except where such conduct would conflict with the following covenants or with such Party’s other obligationshereunder) and shall abide by the following negative and affirmative covenants:(a) Negative Covenants. Such Person shall not, and shall cause its Affiliates to not, do any of the following:(1) Contracts. (i) Modify, amend in any material respect or enter into any new Affiliate Contractsaffecting the ACS Wireless Activities other than the Ancillary Agreements; or modify or amend in any material respect any AssumedContract except (other than with respect to Affiliate Contracts) modifications or amendments in the ordinary course of business that areconsistent with past practices; (ii) enter into any new Contracts that will be binding on GCI except Subscriber Contracts (other thanAffiliate Contracts) entered into in the ordinary course of business that are consistent with past practices or any Contracts that arepermitted under clause (7) below; or (iii) enter into any modification or amendment to any Assumed Contract, or enter into any newContract, that would require a new or additional Consent other than business Subscriber Contracts pursuant to which the Subscriberhas specifically required that a Contract containing a provision requiring Consent be included in such Contract;(2) Disposition of Assets. Sell, assign, lease, or otherwise transfer or dispose of any of the ACS Assets,except for assets consumed or disposed of in the ordinary course of business that are obsolete and no longer usable in the ACSWireless Activities or are replaced by property of equivalent kind and value and except transfers to Affiliates of such Person in order tofacilitate the Transactions;(3) Liens. Create, assume or permit to exist any Liens upon the ACS Assets, except for Permitted Liensand except any Liens that will be removed prior to Closing;(4) Licenses. Do any act or fail to do any act which could reasonably be expected to result in theexpiration, revocation, suspension, non‑renewal or materially adverse modification of any of such Person’s Licenses, or fail toprosecute with due diligence any material applications to any Governmental Authority in connection with the ACS Wireless Activities;(5) No Inconsistent Action. Take any action which is inconsistent in any material respect with suchPerson’s obligations hereunder or which would reasonably be expected to materially hinder or delay the consummation of theTransactions;(6) Offers. Sell, dispose of or offer to sell or dispose (including by way of merger or equity sale orissuance) of any of the ACS Assets, the ACS Wireless Activities or the ACS AWN Interest, or participate in any discussionspertaining to, or entertain offers for any34BUS_RE/5486564.1of, the ACS Assets, the ACS Wireless Activities or the ACS AWN Interest or otherwise negotiate for the sale of any of the ACSAssets, the ACS Wireless Activities or the ACS AWN Interest or make information about the ACS Assets, the ACS WirelessActivities or the ACS AWN Interest available to any Third Party in connection with the possible sale of the ACS Assets, the ACSWireless Activities or the ACS AWN Interest;(7) Promotions. Offer Wireless subscribers or customers marketing promotions, or solicit prospectiveWireless subscribers or customers through the use of marketing promotions, except for marketing promotions that are consistent withpast practices or that do not contain discounts or waivers of costs, fees or charges that are materially less favorable to the serviceprovider than comparable service offerings by other market participants, provided that any offer of a premium, payment, waiver ordiscount all of which is paid by or funded by ACS is permitted;(8) Internal Subscribers. Hinder or interfere with GCI’s efforts to enter into Wireless subscribercontracts with Internal Subscribers. ACS agrees that it shall, and shall cause its Affiliates to, give GCI a right of first offer to provideWireless services to such Internal Subscribers; or(9) Waivers. Waive any material right relating to the ACS Wireless Activities, the ACS Assets or theACS AWN Interest.(b) Affirmative Covenants. Such Person shall do, and shall cause its Affiliates to do, the following:(1) Access to Information. Subject to the requirements set forth in Section 7.9, allow GCI Parent and itsauthorized representatives reasonable access upon reasonable notice at GCI Parent’s expense during normal business hours to the ACSAssets and to all other properties, equipment, books, records, Contracts and documents relating to the ACS Assets and the ACSWireless Activities for the purpose of audit and inspection and shall provide GCI Parent with such information as it may reasonablyrequest for the purpose of allowing the review necessary to issue the Transaction Opinion, and furnish or cause to be furnished to GCIParent or its authorized representatives all information directly related to the ACS Wireless Activities, as GCI Parent may reasonablyrequest. Any such audit, investigation or request for information shall be conducted in such a manner as not to interfere unreasonablywith the ACS Wireless Activities, provided, however, that (i) neither the furnishing of such information to GCI Parent or itsrepresentatives nor any investigation made heretofore or hereafter by GCI Parent shall affect the right of GCI Parent or its Affiliates torely on any representation or warranty made by the ACS Group or its Affiliates in this Agreement or such Person’s or its Affiliates’covenants set forth herein, each of which representations, warranties and covenants shall survive any furnishing of information to, orany investigation by or Knowledge of GCI in accordance with Section 11.2 and (ii) all such information shall be subject to theconfidentiality requirements set forth in Section 7.9;(2) Maintenance of Assets. Use its commercially reasonable efforts to maintain all Drop Circuits,Dedicated Microwave Circuits and Leased Property in good35BUS_RE/5486564.1condition (ordinary wear and tear excepted) in a manner consistent with generally accepted industry standards, and use all of theforegoing assets in a reasonable manner;(3) Insurance. Use its commercially reasonable efforts to maintain insurance policies covering the ACSWireless Activities and the ACS Assets in such amounts and with such coverages as are customarily maintained by similarly situatedPersons consistent with past practices;(4) Consents. Use its commercially reasonable efforts to obtain the Consents required for each memberof the ACS Group to consummate the Transactions and to assign and transfer the ACS Assets to GCI or the Company, as applicable;(5) Books and Records. Maintain the books and records of the ACS Group with respect to ACSWireless and the ACS Assets in accordance with past practices and generally accepted accounting principles;(6) Notification. Promptly notify GCI Parent of any fact or condition known to such Person that causesor constitutes a material breach of any representation, warranty, covenant or commitment made by such Person in this Agreement orany material change in any of the information contained in such Person’s and its Affiliates’ representations and warranties containedherein or in the Schedules hereto;(7) Compliance with Laws. Comply in all material respects with all Legal Requirements applicable tothe operation of the ACS Wireless Activities and the ownership of the ACS Assets and the ACS AWN Interest;(8) Keep Organization Intact. Use such Person’s commercially reasonable efforts to preserve intact itsbusiness and organization relating to the ACS Wireless Activities and preserve for GCI the related goodwill of its suppliers, customersand others having business relations with it;(9) Contracts. Prior to the Closing Date, promptly notify GCI regarding any Contracts entered into ormodified between the date hereof and the Closing Date of the type required to be listed in Schedule 4.2, and promptly provide copiesof such Contracts and any amendments;(10) CETC. Take all commercially reasonable actions necessary to assure continued receipt of CETCCash Flow, including the filing for time periods that occur prior to Closing for which payment is to be received after Closing, and thecontinued filing of high cost line counts;(11) Lifeline. Take all commercially reasonable actions necessary to assure continued receipt ofpayments for Lifeline Subscribers through the federal Lifeline program, including the certification and recertification of LifelineSubscribers;36BUS_RE/5486564.1(12) Offers. Promptly notify GCI Parent of any offer or proposal by any Person concerning any(i) merger, consolidation, other business combination or similar transaction involving the ACS Assets or the ACS Wireless Activities,(ii) sale, lease, license or other disposition directly or indirectly by merger, consolidation, business combination, share exchange, jointventure or otherwise, of assets representing a majority of the consolidated assets, revenues or net income of the ACS Assets or theACS Wireless Activities, (iii) issuance, sale or other disposition (including by way of merger, consolidation, business combination,share exchange, joint venture or similar transaction) of equity interests representing a majority of the voting power of ACS Wireless orany member of the ACS Group a majority of whose assets are ACS Assets or relate to the ACS Wireless Activities, (iv) transaction orseries of transactions in which any Person (or the stockholders of such Person) would acquire beneficial ownership or the right toacquire beneficial ownership of equity interests representing a majority of the voting power of ACS Wireless or any member of theACS Group a majority of whose assets are ACS Assets or relate to the ACS Wireless Activities or (v) any combination of theforegoing or any similar offer or proposal related to the ACS AWN Interest; and(13) Systems and Software. Use its commercially reasonable efforts to maintain its systems andsoftware used in the ACS Wireless Activities and included in the ACS Assets in a manner consistent with generally accepted industrystandards.6.2 GCI Promotion Activities. Unless GCI shall have obtained the prior written consent of ACS, between the date hereof andthe Closing Date, each of GCI, GCI Wireless and GCI Parent shall not, and shall cause their respective Affiliates not to, offer Wirelesssubscribers or customers marketing promotions, or solicit prospective Wireless subscribers or customers through the use of marketingpromotions, in each case, that would specifically target ACS Subscribers.6.3 Further Assurances. ACS and ACS Wireless shall take, and cause its Affiliates to take, such actions, and execute anddeliver to GCI or GCI Wireless, as applicable, such further transfer documents as may be reasonably necessary to ensure the full andeffective transfer of the ACS Assets and the ACS AWN Interest to GCI or GCI Wireless, as applicable, pursuant to this Agreement;provided, however, that GCI or GCI Wireless, as applicable, shall be responsible for all fees, taxes and other costs (other than anyother Party’s attorneys’ fees and expenses) payable with respect to the filing or recording of any such further transfer documents.6.4 Form 8-K Filing. Each of ACS and GCI Parent shall cooperate with the other and provide such information ordocumentation as may be necessary for it to complete the filing of SEC Form 8-K as may be required pursuant to Item 2.01 thereto tobe filed in connection with the Transactions. Each Party will bear its own costs and expenses with respect to this Section 6.4.6.5 CommSoft Authorization. On or before the Closing, ACS shall authorize CommSoft to make available to GCI allSubscriber data with respect to active Subscribers, former subscribers with account balances, and suspended Subscribers, in each casethat is stored in, resides on or is utilized by the CommSoft System, including contact, billing, payment and usage information, andcredit card information, in each case to the extent reasonably practicable, by executing and delivering the Authorization Notice in theform of Exhibit L.37BUS_RE/5486564.1SECTION 7.SPECIAL COVENANTS AND AGREEMENTS7.1 Consents.(a) As promptly as practicable after the date hereof, ACS shall and shall cause each member of the ACS Group, asapplicable, to request the consent of such Third Parties whose Consents are required, and thereafter shall and shall cause each memberof the ACS Group, as applicable, to use its commercially reasonable efforts to obtain such Consents as expeditiously as possible,subject to the other provisions of this Section 7.1. No Consent shall include any material adverse change to the terms of any AssumedContract unless otherwise agreed to in writing by GCI. If notwithstanding its good faith commercially reasonable efforts, the ACSGroup is unable to obtain any Consent (or is unable to cause its Affiliates to obtain any such Consent), ACS shall not be liable for anybreach of this covenant (but GCI and GCI Wireless shall have no obligation to effect the Closing unless the condition set forth inSection 8.2(c) shall have been satisfied) except as set forth in Section 7.8. Nothing herein shall require the expenditure or payment ofany funds (other than in respect of normal and usual filing fees and such Party’s attorneys’ fees, other normal costs of doing business orcosts described in Section 7.1(c)) or the giving of any other consideration by any Party in order to obtain any Consent.(b) To the extent requested by the ACS Group, GCI agrees to cooperate fully with the ACS Group in obtaining anynecessary Consents, but GCI will not be required (i) to make any payment to any Person from whom such Consent is sought or (ii) toaccept any material adverse changes in, or the imposition of any material adverse condition to, any Assumed Contract as a condition toobtaining any Consent. The Parties shall jointly participate in negotiations with Third Parties with respect to the Consents. Each Partyshall not, and shall cause its Affiliates not to, without the prior written consent of the other Parent (which may be withheld at suchParent’s sole discretion), seek amendments or modifications to the Assumed Contracts which would reasonably be expected to delay orprevent obtaining any Consents necessary for the Closing.(c) ACS shall bear any costs required to remedy any item of noncompliance by ACS or any of its Affiliates with theterms of its Contracts. GCI shall bear any costs arising with respect to the performance of the Assumed Contracts on and after theClosing Date (other than any costs arising as a result of noncompliance by ACS or any of its Affiliates) in accordance with the terms ofany such Assumed Contracts (including any amendments or modifications) executed or assumed by GCI; provided that,notwithstanding the preceding provisions of this sentence, GCI shall bear any costs arising with respect to the Transition Contractsfrom and after the Transition Completion Date (except as otherwise provided in the A&R ACS Services Agreement) and with respectto the Assumed Leases from and after the Assumed Leases Assumption Date, in each case rather than from and after the Closing Date.(d) Each Party shall promptly furnish to any Third Party such accurate and complete information regarding such Partyand its Affiliates, including financial information concerning such Party and its Affiliates (other than information which such Partyreasonably deems to be proprietary), as such Third Party may reasonably require in connection with obtaining any Consent. Each Partyshall ensure that its appropriate officers and employees shall be available to attend any scheduled hearings or meetings in connectionwith obtaining any Consent. 38BUS_RE/5486564.1(e) The Parties shall use commercially reasonable efforts to deliver to the FCC and any Subscribers any noticerequired by the Communications Act to be delivered in connection with the consummation of the Transactions; provided, however,that the text of any such notice shall be mutually agreed upon by the Parties.7.2 Cooperation. The Parties shall cooperate fully in good faith with each other and their respective counsel and accountantsin connection with any actions required to be taken as part of their respective obligations under this Agreement, and each Party shallexecute such other documents as may be reasonably necessary to the implementation and consummation of this Agreement, andotherwise shall use its commercially reasonable efforts in good faith to do all things necessary, proper or advisable in order toconsummate the Transactions in the most expeditious manner practicable (including using commercially reasonable efforts to cause theconditions to Closing set forth in Section 8 for which such Party is responsible to be satisfied on or before the Target Closing Date oras soon as reasonably practicable and, in the case of GCI Parent, GCI and GCI Wireless, using their commercially reasonable efforts to(i) obtain financing as contemplated by Sections 5.7 and 8.2(m) and (ii) enter into the arrangements with CommSoft and other Personsas contemplated by Section 8.2(n)) and to fulfill its obligations hereunder. ACS shall take all commercially reasonable steps necessaryto transfer the administrative entity designation (AOCN) authority for OCN 6304 to the GCI AOCN 7785 and provide to GCI a copyof the most recently filed FCC Form 502 (NRUF) for OCN 6304, in each case no later than 30 days after Closing. Without limiting theforegoing, if a Governmental Authority requires an arrangement to be addressed through another form of agreement that requiresGovernmental Consent, or asserts that an arrangement requires a Governmental Consent the Parties did not believe was required, theParties agree to work in good faith to obtain that Consent.7.3 Taxes, Fees and Expenses.(a) ACS shall, at its expense, prepare and file (or cause to be prepared and filed) all Tax Returns of ACS or itsAffiliates relating to the operation of the ACS Wireless Activities or the ownership of the ACS Assets or the ACS AWN Interest forany Tax period ending on or prior to the Closing Date. GCI shall, at its expense, prepare and file (or cause to be prepared and filed) allTax Returns of GCI or its Affiliates relating to the operation of the assets acquired pursuant to this Agreement for any Tax periodending after the Closing Date. Each of ACS and GCI will cooperate in good faith in the preparation and filing of Tax Returns relatingto the ACS Assets and the AWN Interests and provide information to the other Party as is reasonably necessary for such Tax Returns.The Parties shall treat the Company as having terminated as a partnership within the meaning of Section 708(b)(1)(A) of the Code onthe Closing Date, and the Company shall, in accordance with Section 11.4 of the Operating Agreement (relating to the filing of TaxReturns), at its expense, prepare and file all final Tax Returns relating to income Taxes for the Tax period ending on the Closing Date.For the avoidance of doubt, the Company shall, at its expense, prepare and file all other Tax Returns of the Company in accordancewith Section 11.4 of the Operating Agreement.(b) ACS shall pay and hold GCI Parent and its Affiliates harmless from any liability for payment of or otherwise withrespect to any Taxes, without duplication, (i) of ACS or39BUS_RE/5486564.1its Affiliates or (ii) relating to the operation of the ACS Wireless Activities or the ownership of the ACS Assets or the ACS AWNInterest for any Tax period (or portion thereof) ending on or prior to the Closing Date (for purposes of this clause (ii), all real propertyTaxes, personal property Taxes and similar ad valorem obligations levied with respect to the ACS Assets for a Tax period that includes(but does not end on) the Closing Date shall be apportioned between ACS and GCI based upon the number of days of such period(which period shall include the Closing Date) included in the pre‑Closing Tax period and the number of days of such Tax period afterthe Closing Date).(c) ACS shall pay, or shall reimburse GCI (to the extent GCI shall have paid) for, all sales, use, transfer, andrecordation and documentary Taxes, if any, arising out of the transfer by ACS of the ACS Assets to GCI pursuant to this Agreement.(d) Upon receipt of any bill for real or personal property Taxes or similar ad valorem Taxes relating to the ACSAssets, or upon the filing of any Tax Return with respect to any such ad valorem Taxes, ACS or GCI, as applicable, shall present astatement to the other setting forth the amount of such Taxes that is attributable to the portion of the applicable Tax period that endedon the Closing Date, with such supporting evidence as is reasonably necessary to calculate such prorated amount. The prorated amountshall be paid by the Party owing it to the other within 30 days after delivery of such statement. Any payment required under thisSection 7.3(d) and not made within 30 days of delivery of the relevant statement shall bear interest at LIBOR plus 10% per annumuntil fully paid.(e) Except as otherwise provided in this Agreement, each Party shall pay its own attorneys’ fees and other expensesincurred in connection with the negotiation, authorization, preparation, execution, and performance of this Agreement; provided,however, that each of ACS and GCI Parent shall pay 50% of any required filing fees in connection with applications for governmentalapproval of the Transactions.7.4 Brokers. Each Party represents and warrants that, except as set forth in Schedule 7.4, neither it nor any Person acting onits behalf has incurred any liability for any finders’ or brokers’ fees or commissions in connection with the Transactions.7.5 Employee Matters.(a) Neither GCI nor any of its Affiliates shall be obligated to hire any employee of ACS or any of its Affiliates.Nothing in this Agreement is intended to confer upon any employee of ACS or its Affiliates or such employee’s legal representative orheirs any rights as a third-party beneficiary or otherwise or any remedies of any kind whatsoever under or by reason of this Agreement,or the Transactions, including any rights of employment or continued employment. All rights and obligations created by thisAgreement are solely among the Parties.(b) ACS shall retain all liabilities with respect to any employees terminated by ACS or any of its Affiliates prior to orafter the Effective Time.(c) ACS shall comply, as necessary, with the provisions of the Worker Adjustment and Retaining Notification Act, asamended, 29 U.S.C. §2101, et seq. (the “WARN40BUS_RE/5486564.1Act”), as it relates to the Transactions, including providing all affected employees and other necessary persons with any notice thatmay be required under the WARN Act.7.6 Risk of Loss. The risk of any loss, damage or impairment, confiscation or condemnation of any of the ACS Assets fromany cause whatsoever shall be borne by ACS at all times prior to the completion of the Closing (and prior to the Transition CompletionDate with respect to the Transition Contracts and prior to the Assumed Leases Assumption Date with respect to the Assumed Leasesand the Leased Property pursuant to any Assumed Leases) as and to the extent provided in Section 11. In the event of any loss,damage or impairment, confiscation or condemnation, the proceeds of any claim for loss payable under any insurance policy, judgmentor award with respect thereto shall be applied by ACS to repair, replace or restore such ACS Assets to their prior condition as soon asreasonably practicable after such loss, impairment, condemnation or confiscation.7.7 Post-Closing Access to Information. Following the Closing for a period of 24 months, each Party (i) shall allow each otherParty and its authorized representatives reasonable access, on reasonable notice and at such other Party’s expense during normalbusiness hours, to such Party’s books and records, for the purpose of audit, inspection or investigation relating to the business, tax andfinancial reporting requirements of such other Party as well as to any Third-Party claims made against such other Party, relating to orarising from the acquisition, ownership or conduct of the operations of the ACS Assets, the AWN Interest or the ACS WirelessActivities during the time period prior to Closing, and (ii) shall furnish or cause to be furnished to such other Party or its authorizedrepresentatives all information with respect to the ACS Assets, the AWN Interest and the ACS Wireless Activities as such other Partymay reasonably request, including information necessary to complete any compliance report or filing applicable to the ACS WirelessActivities, in each case subject to reasonable confidentiality and use restrictions. Any such audit, investigation or request forinformation shall be conducted in such manner as not to interfere unreasonably with the then-ongoing business of ACS or GCI, asapplicable, and their respective Affiliates.7.8 Post-Closing Consents and Subsequent Transfers.(a) Schedule 7.8 contains a list (the “Subscriber Contract Consent List”) setting forth all Subscriber Contracts as ofthe Signing Date for which Consent is required in order to assign or transfer such Subscriber Contracts pursuant to this Agreement andfor which such Consent has not been obtained. If ACS or ACS Wireless enters into a new Subscriber Contract requiring Consentpursuant to Section 6.1(a)(1)(iii), ACS shall as promptly as practicable, but in no event later than two Business Days after entering intosuch Contract, provide GCI with an updated Schedule 7.8 containing such Contract. On the earlier of 30 days after the Signing Date or15 days before the estimated Closing Date, ACS shall provide copies of all Contracts listed on the Subscriber Contract Consent List forwhich Consent has not been obtained. No later than five Business Days after the delivery by ACS to GCI of such Contracts, GCI shallnotify ACS in writing of any Contracts listed on such updated Subscriber Contract Consent List that it elects not to assume if Consentwith respect thereto is not obtained by Closing (each such notice, a “Non-Election Notice”). All Subscriber Contracts listed on theSubscriber Contract Consent List for which Consent is not obtained by Closing and a Non-Election Notice is timely received shall notbe assumed by GCI and41BUS_RE/5486564.1will be Excluded Assets. All Subscriber Contracts listed on the Subscriber Contract Consent List for which Consent is obtained byClosing or a Non-Election Notice is not timely received shall be assumed by GCI pursuant to this Agreement as part of the ACSAssets, and all Subscribers under such Subscriber Contracts shall be included in the Actual Postpaid Subscriber Count or the ActualPrepaid Subscriber Count, as applicable. All Subscriber Contracts for which Consent is not obtained by Closing and a Non-ElectionNotice has been timely received shall be Excluded Assets and may be terminated by ACS, assigned to a Third Party or otherwise dealtwith in ACS’s sole discretion. Notwithstanding anything to the contrary contained herein or in any Ancillary Agreement, ACS’sassignments of such Subscriber Contracts shall not constitute a breach of any non-competition or other provision of this Agreement orany Ancillary Agreement.(b) In the event that ACS shall be unable to obtain prior to Closing (or prior to the Transition Completion Date withrespect to any Transition Contract or prior to the Assumed Leases Assumption Date with respect to any Assumed Leases) any Consentrequired to assign or transfer any of the Assumed Contracts (other than Subscriber Contracts) to be assigned or transferred by ACS toGCI, ACS and GCI agree that at the option of GCI, either (1) GCI shall waive such Consent as a precondition to assignment and suchAssumed Contract shall be assigned by ACS to GCI as part of the ACS Assets, (2) at GCI’s election, such Contract shall be anExcluded Asset (but not an Excluded Business Customer Contract) and such Contract shall not be assigned or assumed, or (3) suchAssumed Contract to which such Consent relates shall not be assigned and (i) ACS shall cause such Assumed Contract to remain ineffect and shall use its commercially reasonable efforts to give GCI the benefit of such Assumed Contract to the same extent as if it hadbeen assigned, and GCI shall perform the obligations of ACS or its Affiliates under such Assumed Contract relating to the benefitobtained by GCI, and (ii) ACS and GCI shall continue to cooperate to try to obtain such Consent as soon as practicable after Closingor after the Transition Completion Date or the Assumed Contracts Assumption Date, as applicable, with the provisions of Section 7.1continuing to apply to such Consent. Upon the subsequent receipt of any such Consent to transfer any such Assumed Contract, orupon the subsequent waiver by GCI of the requirement that such Consent be obtained, such Assumed Contract shall be automaticallyassigned to GCI under the terms hereof without any further action by any Party.7.9 Confidentiality/Press Releases. Each Party will hold, and will cause its Affiliates and its and their officers, directors,employees, lenders, accountants, representatives, agents, consultants and advisors to hold, in confidence all information (other thansuch information as may be publicly available) furnished by, or obtained from, the other Party and its Affiliates (“Provider”) to suchParty and its Affiliates (“Receiver”) in connection with the Transactions, as well as all information concerning Provider, its Affiliatesor the ACS Assets or the ACS Wireless Activities contained in any analyses, compilations, studies or other documents prepared by oron behalf of Receiver based on information provided by, or obtained from, Provider (collectively, the “Information”) in the mannerset forth in the Confidentiality Agreement.(a) If the Transactions are not consummated, each Party, as Receiver, agrees that: (i) the Information, except for thatportion thereof which consists of analyses, compilations, studies or other documents prepared by or on behalf of Receiver, will bereturned to Provider immediately upon Provider’s request therefor; and (ii) that portion of the Information which consists of analyses,42BUS_RE/5486564.1compilations, studies or other documents prepared by or on behalf of Receiver will be destroyed by Receiver. Notwithstanding theforegoing, Receiver may retain data or electronic records containing Information (i) for the legal department of Receiver forcompliance, evidentiary or archival purposes and (ii) for the purposes of backup, recovery, contingency planning or business continuityplanning so long as such data or records are not accessible in the ordinary course of business and are not accessed except as requiredfor backup, recovery, contingency planning or business continuity purposes.(b) Each Party shall, and shall cause its Affiliates to, consult with each other before issuing, and provide each other theopportunity to review and comment upon, any press release or other public statements with respect to the Transactions and shall notissue any such press release or make any such public statement without the prior written consent of the other Parent, except withrespect to (i) any disclosures to any Governmental Authority which it is required to make under any Legal Requirement (includingwith respect to any such Person’s public reporting obligations under applicable securities laws), or (ii) filing this Agreement with, ordisclosing the terms of this Agreement to, any institutional lender to such Person or any of its Affiliates or potential investor in suchPerson or any of its Affiliates. The Parties shall cooperate to issue a press release publicly announcing this Agreement and theTransactions and shall mutually agree upon the timing and contents of such press release. Notwithstanding the foregoing, any Partymay without consulting with any other Party make additional announcements that are substantially similar in form as the mutuallyagreed upon press release referenced in the prior sentence.(c) Each Party shall, and shall cause its Affiliates to, consult with each other before issuing, and provide each other theopportunity to review and comment upon, any communication to Subscribers, except communications in conformance and compliancewith the terms of the Transition Services Agreement or the IP License Agreement.7.10 Antitrust Notice.(a) GCI Parent shall as promptly as practicable, but in no event later than five Business Days following the executionand delivery hereof, contact the Antitrust Division to disclose the agreement of the Parties to consummate the Transactions. Ifrequested by GCI, ACS shall, and shall cause its Affiliates to, cooperate reasonably in all respects with GCI in connection with anyresponse, filing or submission requested by the United States Federal Trade Commission (the “FTC”) or the United States Departmentof Justice (the “Antitrust Division”) and in connection with any investigation or other inquiry with respect thereto. Each Parent willuse its reasonable best efforts to do each of the following with respect to matters relating to any such response, filing or submission: (i)cooperate reasonably in all respects with the other Parent in connection with any filing or submission and in connection with anyinvestigation or other inquiry, including any proceeding initiated by a private party, (ii) promptly inform the other Parent of anycommunication received by such Party from, or given by such Party to, the Antitrust Division or any other Governmental Authorityand of any material communication received or given in connection with any proceeding by a private party, in each case regarding anyof the Transactions, (iii) permit the other Parent, or the other Parent’s legal counsel, to review any substantive communication given byit to, and consult with each other in advance of any meeting or conference with, the Antitrust43BUS_RE/5486564.1Division or any such other Governmental Authority or, in connection with any proceeding by a private party, with any other Person, ineach case regarding any of the Transactions, (iv) give the other Parent the opportunity to attend and participate in such meetings andconferences to the extent allowed by applicable Legal Requirements or by the applicable Governmental Authority, (v) in the event oneParent is prohibited by applicable Legal Requirements or by the applicable Governmental Authority from participating in or attendingany meetings or conferences, keep the other promptly and reasonably apprised with respect thereto, (vi) cooperate reasonably in thefiling of any memoranda, white papers, filings, correspondence, or other written communications explaining or defending theTransactions, articulating any regulatory or competitive argument, and/or responding to requests or objections made by anyGovernmental Authority and (vii) furnish the other Parent with copies of all correspondence, filings, and written communicationsbetween the Parent and any Governmental Authority with respect to this Agreement and the Transactions, except that any materialscontaining valuation information, internal financial information, or competitively sensitive information may be designated for limiteddistribution as appropriate. Notwithstanding anything in this Section 7.10 to the contrary, no Party shall be required to share with anyother Party confidential or proprietary information that is provided by such Party to the FTC or Antitrust Division and is unrelated tothe Transactions.(b) In the event that any objections to the Transactions are asserted by any Governmental Authority under any AntitrustLaw, the Parties will in good faith discuss at such time and each use reasonable best efforts to resolve such objections including,without limitation, if a Proceeding is instituted challenging any Transaction as violative of any Antitrust Law, using reasonable bestefforts to resist or resolve such Proceeding; provided, however, that neither Party shall be required to provide any undertakings or tocomply with any conditions that, in its reasonable opinion, would materially change the Transactions or such Party’s business, taken asa whole.7.11 CETC Amounts. After the Closing, ACS shall promptly deliver, and cause its Affiliates to promptly deliver, to theCompany an amount equal to all CETC Cash Flow as and when received by it and its Affiliates which shall be used by the Companyfor maintenance and support of the Company’s Wireless network. ACS shall cooperate with GCI to transfer to GCI or the Companythe right to the CETC Cash Flow, including transfer of the USAC separate Study Area Codes for the ACS Wireless Activities.7.12 Allocation. The Parties agree that the Purchase Price (including the Assumed Liabilities, if any, attributable to the ACSAssets to the extent properly taken into account for U.S. federal income tax purposes and any other items treated as consideration paidby GCI or GCI Wireless for such purposes) shall be allocated among each member of the ACS Group transferring the ACS Assets orthe AWN Interest, then further allocated among the ACS Assets and the ACS AWN Interest sold by such Member in accordance withCode Section 1060 and the Treasury regulations thereunder (and any similar provision of state, local or foreign law, as appropriate) asshown on the allocation schedule (the “Allocation Schedule”). In addition, the Allocation Schedule shall set forth the value of each ofthe Company assets, broken down in such a manner to enable ACS to determine the amount of gain recognized on the sale of the ACSAWN Interest characterized as ordinary income under Section 751 of the Code. The Allocation Schedule shall be (i) prepared by theParties as soon as practicable following the completion of the valuation report by Duff &44BUS_RE/5486564.1Phelps pursuant to Section 7.18, (ii) subject to mutual agreement by ACS and GCI Parent and (iii) consistent with the valuationprepared by Duff & Phelps pursuant to Section 7.18. ACS and GCI Parent and their Affiliates shall file all Tax Returns (includingInternal Revenue Service Form 8594) in a manner consistent with, and shall take no position in any audit or administrative proceedinginconsistent with, the Allocation Schedule. Any subsequent allocation necessary as a result of an adjustment to the consideration to bepaid hereunder shall be determined by the Parties in a manner consistent with the Allocation Schedule; provided, however, that anyadjustment to the Purchase Price pursuant to Section 2.3(a) shall relate solely to the AWN Interest, and any adjustment to the PurchasePrice pursuant to any other provision of Section 2.3 shall relate solely to the ACS Assets.7.13 Forwarding Inquiries and Payments; Collection of Accounts Receivable.(a) For a period of 12 months after the Closing Date, ACS shall, and shall cause its Affiliates to, forward to GCI anye-mail, facsimile, postal mail or telephone inquiries that the ACS Group receives to the extent relating to the ACS Assets, the ACSWireless Activities or the ACS AWN Interest and shall promptly after the Closing Date file complete and adequate forwarding noticeswith the postal officials and appropriate telephone utilities provided by GCI for the forwarding to GCI of all mail and telephone callsrelating to the ACS Assets, the ACS Wireless Activities or the ACS AWN Interest.(b) Except for payments made pursuant to the provisions of this Agreement, to the extent (i) the ACS Group receivesany payments in respect of any portion of the ACS Assets, the ACS Wireless Activities or the ACS AWN Interest, in each case withrespect to (x) Wireless goods or services provided by GCI after Closing or (y) the ownership of the ACS Assets or the ACS AWNInterest after Closing the ACS Group shall promptly forward the same to GCI, or (ii) GCI receives any payments in respect of any ofthe Excluded Assets, GCI shall promptly forward the same to ACS, in each case to the extent not otherwise addressed pursuant to thisAgreement or the Ancillary Agreements. The Parties also agree to use commercially reasonable efforts to coordinate the collection ofthe Accounts Receivable of the ACS Wireless Activities. Each of ACS and GCI agree to allocate payments received for a combinationof Wireless services and other services in accordance with the policies and procedures described on Schedule 7.13.(c) At least two Business Days before Closing, ACS shall provide to GCI a list of all Subscribers that have requestedto pay by wire transfer or that ACS has agreed to accept payment by wire transfer.7.14 Transaction Opinion. GCI Parent shall use reasonable best efforts to cause the Transaction Opinion to be issued so as notto delay the Closing. Such efforts shall include entering into an engagement letter as soon as reasonably practicable with a nationallyrecognized investment banking or valuation firm, paying any applicable fees, providing all necessary information to such firm andrequesting the Transaction Opinion from such firm. ACS shall take all commercially reasonable actions requested by GCI Parent tocooperate and provide information required in connection with issuance of the Transaction Opinion.7.15 Covenants Not To Compete or Solicit.45BUS_RE/5486564.1(a) Neither ACS nor any of its controlled Affiliates will engage, directly or indirectly, including as a reseller, in theRestricted Wireless Business in the State of Alaska for a period of four years after the Closing Date; provided, however, that nothingcontained herein shall be deemed to prohibit ACS or any of its Affiliates from (i) performing under and in accordance with the terms ofthe Excluded Business Customer Contracts or (ii) acquiring as an investment not more than 1% of the outstanding capital stock of aRestricted Wireless Business whose capital stock is traded on a national securities exchange.(b) For a period of six months after the Closing Date, no Party nor any of its controlled Affiliates will, directly orindirectly, solicit, recruit or hire any Person set forth on Schedule 7.15 to the extent that any such Person has not been terminated bythe applicable Party.7.16 Leases. Within 45 days after the Signing Date, GCI will provide written notice to ACS setting forth those OfferedLeases listed on the Leased Property Schedule that GCI desires to assume upon completion of the transition period under theTransition Services Agreement (each an “Assumed Lease”). All Assumed Leases will be Assumed Contracts under this Agreement,and all other Offered Leases will be Excluded Assets and Excluded Liabilities under this Agreement.7.17 Post Closing Deliveries. ACS shall, or shall cause its subsidiaries or other Persons, as applicable to, deliver to GCI:(a) On or before the date that is five Business Days after Closing, all Contracts for provision of Wireless services toSubscribers that are stored in or reside on the CommSoft System, in each case, in electronic format (with signature or recorded third-party verification) with respect to all active Subscribers, former subscribers with account balances at Closing, and suspendedSubscribers. For the avoidance of doubt, the foregoing delivery requirement will be satisfied by ACS providing access to theCommSoft System or other electronic system to GCI to the extent such delivery requirement is included in the CommSoft System.Contracts “in transit” (e.g., contracts for services sold in a Retail Store which are not entered into CommSoft at the point of sale) willbe provided electronically within two Business Days after their entry into CommSoft.(b) On or before the date that is ten Business Days after Closing, all Contracts for the provision of Wireless services tocommercial Subscribers other than those described in Section 7.17(a) that, to the Knowledge of ACS, have not been delivered to GCI.(c) On or before the date that is five Business Days after Closing, with respect to Lifeline Subscribers, the latestrecertification date with respect to each Lifeline Subscriber, in each case in electronic format.(d) On or before the date that is five Business Days after Closing, all Subscriber data that is not stored in or does notreside on the CommSoft System that is reasonably requested by GCI and that is in ACS’s possession including, to the extentreasonably requested and in ACS’s possession: historical CPNI data, One Time Payment information, Trouble Ticket information,#5775 (contract) Usage Statistics, Customer Threshold Configurations, 3PV Files and Subscriber data resident in the Customer DataStore or Wireless Access Database systems.46BUS_RE/5486564.1(e) On or before the date that is ten Business Days after Closing, a detailed report of prepaid wireless deferred revenuecalculated consistent with ACS’s past practices.(f) On or before the date that is five Business Days after Closing, all Wireless call history information in its possession,including call history for former subscribers in electronic format sourced from the primary database in which the information is stored.7.18 Financial Reporting. (a) ACS and GCI agree that they will retain Duff & Phelps to provide valuation services withrespect to the Transactions and that each of ACS and GCI will bear and be responsible for 50% of the cost of such services as arerequired for ACS’s and GCI’s financial reporting. The cost of any additional services provided by Duff & Phelps shall be borne by theParty requesting such services. Each of ACS and GCI agree that it will accept the valuation determined by Duff & Phelps as set forthin its valuation report for financial reporting purposes to the extent applicable after being provided with an opportunity to review andcomment on such report for a period not to exceed ten Business Days. Each of ACS and GCI will use reasonable best efforts to causethe valuation report to be issued. Such efforts shall include taking all commercially reasonable actions requested by Duff & Phelps toprovide information required in connection with such report and to cooperate in good faith with each other in connection with anyactions required to be taken in connection with the issuance of such report.(a) If Closing occurs after March 1, 2015, the Company will complete a stub period audit if required in connectionwith ACS’s public reporting obligations and the cost of such audit shall be the responsibility of the Company. Each of ACS and GCIagree that Grant Thornton will be engaged to provide such audit.7.19 Excluded Business Customers.(a) GCI and ACS agree to negotiate in good faith for a period not to exceed 180 days after Closing to reach anagreement with respect to the Excluded Business Customers, which agreement will provide that (i) the Excluded Business Customerswill remain customers of ACS for the period specified in the Excluded Business Customers Contracts, including any contractedextensions specifically set forth therein, (ii) GCI will be paid the greater of (A) all revenues, fees and charges payable by the ExcludedBusiness Customers for Wireless services and (B) wholesale rates, fees and charges currently payable by ACS to the Company toprovide Wireless service to the Excluded Business Customers, (iii) GCI will have reasonable third party audit rights with respect to theExcluded Business Customer Contracts to verify wireless revenues, fees and charges payable by the Excluded Business Customersthereunder, which audit rights (A) shall not be exercised more than once every other year and (B) shall not unreasonably interfere withthe business operations of ACS and its Affiliates, (iv) ACS will retain responsibility for all customer care and customer relationsfunctions for the Excluded Business Customers and enforce a reasonable and customary excessive roaming policy with respect to theExcluded Business Customers, (v) GCI will provide Wireless services and billing support functions for the Excluded BusinessCustomers for the period specified in the Excluded Business Customers Contracts, including any contracted extensions specifically setforth therein, under the terms of the applicable Excluded Business Customers Contract, (vi) ACS will not amend any ExcludedBusiness Customer Contract, except to execute contracted extensions, (vii) to the extent technically feasible, GCI will preserve theACS logo on the Excluded47BUS_RE/5486564.1Business Customer handsets and produce paper bills in the name of and on behalf of ACS and (viii) GCI will have no obligation orresponsibility to maintain any Wireless network or system functionality with respect to the Excluded Business Customers that it or theCompany does not provide to any other Wireless customers. During the period of negotiation, GCI agrees to provide Wireless servicesto the Excluded Business Customers on commercially reasonable terms consistent with the foregoing to the extent practicable, and usecommercially reasonable efforts to comply with the terms and conditions of the Excluded Business Customer Contracts; provided,however, that, other than with respect to its obligations to use commercially reasonable efforts set forth above, GCI and its Affiliatesshall have no liability to any member of the ACS Group or to any Excluded Business Customer for failing to comply with such termsand conditions. During such 180 day period, GCI will bill ACS for all revenues, fees, and charges payable by the Excluded BusinessCustomers for Wireless under the terms of the Excluded Business Customer Contracts and ACS will pay such amounts to GCI oncustomary commercial terms.(b) If the Parties fail to reach an agreement with respect to the Excluded Business Customers within 180 days afterClosing, neither GCI nor any of its Affiliates will have any further obligation to provide Wireless service to the Excluded BusinessCustomers and ACS will pay to GCI the difference between (a) the Subscriber Adjustment as finally determined pursuant to Section2.3 and (b) the Subscriber Adjustment that would have applied if the Excluded Business Customers were included in the definition ofNonqualifying Subscribers (the “Excluded Business Customer Payment”). ACS will pay any Excluded Business CustomerPayment to GCI on or before the date that is 15 days after the expiration of the 180 day period by wire transfer of immediatelyavailable funds to an account or accounts designated by GCI. GCI will have the right to dispute ACS’s calculation of the ExcludedBusiness Customer Payment subject to the procedures and time frames set forth in Sections 2.3(f), (g), and (h) with the expiration ofthe 180 day period being substituted for the Closing Date in such Sections. Any payment pursuant to this Section 7.19(b) shall betreated for all Tax purposes as an adjustment to the Purchase Price.SECTION 8.CONDITIONS TO THE OBLIGATIONS TO CLOSE8.1 Conditions to Obligations of ACS Group. All obligations of ACS and ACS Wireless at the Closing hereunder are subjectto the satisfaction, on or before the Closing Date, of each and every one of the following conditions, all or any of which may bewaived, in whole or in part, by ACS for purposes of consummating the Transactions, but without prejudice to any other right orremedy which ACS or ACS Wireless may have hereunder as a result of any misrepresentation by, or breach of any covenant orwarranty of, GCI or GCI Wireless contained in this Agreement or any other certificate or instrument furnished by GCI or GCIWireless hereunder:(a) Representations and Warranties. All representations and warranties of each of GCI and GCI Wireless in thisAgreement shall be true and correct in all respects to the extent qualified by materiality and in all material respects to the extent not soqualified at and as of the Closing Date as though such representations and warranties were made at and as of such time, except insofaras any such representation or warranty is made as of the date of this Agreement or any other specified date (in which case it shall betrue and correct in all respects to the extent qualified by materiality and in all material respects to the extent not so qualified as of thedate of48BUS_RE/5486564.1this Agreement or such other specified date). ACS and ACS Wireless shall have received a certificate signed by authorized officers ofGCI and GCI Wireless to the effect of the preceding sentence.(b) Covenants and Conditions. Each of GCI and GCI Wireless shall have in all material respects performed andcomplied with all covenants, agreements and conditions required by this Agreement to be performed or complied with by it prior to oron the Closing Date. ACS and ACS Wireless shall have received a certificate signed by authorized officers of GCI and GCI Wirelessto the effect of the preceding sentence.(c) Ancillary Agreements. The Ancillary Agreements shall have been duly executed and delivered by GCI, GCIWireless and the other parties thereto, as applicable (other than ACS, ACS Wireless or any of their Affiliates), and each AncillaryAgreement shall constitute the legal, valid, and binding obligation of each of such parties, enforceable against it in accordance with itsterms, except to the extent such enforceability may be limited by the Enforceability Exceptions.(d) Consents. All Governmental Consents and the Specified Consents shall have been obtained.(e) Governmental Orders. No Governmental Authority shall have enacted, issued, promulgated, enforced or enteredany order, writ, judgment, injunction, decree, stipulation, determination or award that is in effect and has the effect of making anymaterial aspect of the Transactions illegal, otherwise restraining or prohibiting consummation of any material aspect of the Transactionsor causing any material aspect of the Transactions to be rescinded following completion thereof.(f) Deliveries. GCI and GCI Wireless shall have made or stand willing and able to make all the deliveries set forth inSection 9.3.(g) Absence of Proceedings. There shall not be pending or overtly threatened in writing any Proceeding(i) challenging or seeking to restrain or prohibit the Transactions or seeking to obtain from ACS or ACS Wireless or any of theirrespective Affiliates, in connection with the Transactions, any damages, forfeiture, license revocation, or other penalty, condition orliability that, individually or in the aggregate, could reasonably be expected to have a material effect on ACS or any of its Affiliates, or(ii) seeking to impose any conditions or restrictions that, individually or in the aggregate, in the reasonable judgment of ACS or ACSWireless, would materially impair (or would reasonably be expected to materially impair) the ability of ACS or ACS Wireless toconsummate the Transactions or would reasonably be expected to have a material adverse effect on the economic benefits to ACS orACS Wireless arising therefrom.(h) Bankruptcy Event. No Bankruptcy Event shall have occurred and be continuing with respect to GCI or GCIWireless.8.2 Conditions to Obligations of GCI and GCI Wireless. All obligations of GCI and GCI Wireless at the Closing hereunderare subject to the satisfaction, on or before the Closing Date, of each and every one of the following conditions, all or any of whichmay be waived, in whole or49BUS_RE/5486564.1in part, by GCI Parent for purposes of consummating the Transactions, but without prejudice to any other right or remedy which GCIor GCI Wireless may have hereunder as a result of any misrepresentation by, or breach of any covenant or warranty of, ACS or ACSWireless contained in this Agreement or any other certificate or instrument furnished by ACS or ACS Wireless hereunder:(a) Representations and Warranties. All representations and warranties of each of ACS and ACS Wireless in thisAgreement shall be true and correct in all respects to the extent qualified by materiality and in all material respects to the extent not soqualified at and as of the Closing Date as though such representations and warranties were made at and as of such time, except insofaras any such representation or warranty is made as of the date of this Agreement or any other specified date (in which case it shall betrue and correct in all respects to the extent qualified by materiality and in all material respects to the extent not so qualified as of thedate of this Agreement or such other specified date). GCI and GCI Wireless shall have received a certificate signed by authorizedofficers of ACS and ACS Wireless to the effect of the preceding sentence.(b) Covenants and Conditions. Each of ACS and ACS Wireless shall have in all material respects performed andcomplied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by it prior to oron the Closing Date. GCI and GCI Wireless shall have received a certificate signed by authorized officers of ACS and ACS Wirelessto the effect of the preceding sentence.(c) Consents. Each of the Material Consents to be obtained by a member of the ACS Group, in form and substancereasonably acceptable to GCI, shall have been duly obtained and delivered to GCI with, as a result of obtaining such Consent, nomaterial adverse change having been made in the terms of the License or Assumed Contract that is the subject of such MaterialConsent.(d) Ancillary Agreements. The Ancillary Agreements shall have been duly executed and delivered by ACS, ACSWireless and the other parties thereto, as applicable (other than GCI, GCI Wireless or any of their Affiliates), and each AncillaryAgreement shall constitute the legal, valid and binding obligation of each of such parties enforceable against it in accordance with itsterms, except to the extent such enforceability may be limited by the Enforceability Exceptions.(e) Lien Searches. Any lien searches that shall have been obtained by GCI, at its expense, shall disclose no Liens onany material ACS Assets other than Permitted Liens and Liens under the Credit Agreement, dated as of October 21, 2010, asamended, among Alaska Communications Systems Holdings, Inc., ACS, the lenders party thereto and JPMorgan Chase Bank, asadministrative agent.(f) Governmental Consents. All Governmental Consents shall have been obtained.(g) Material Adverse Change. ACS and its Affiliates shall not have suffered any material adverse change in the ACSAssets or the ACS Wireless Activities, its liabilities, condition50BUS_RE/5486564.1(financial or otherwise) or results of operations, including as a result of any damage, destruction or loss affecting the ACS Assets, otherthan any material adverse change resulting from (i) general economic conditions, (ii) changes adversely affecting the Wireless industry(so long as the ACS Assets or the ACS Wireless Activities are not disproportionately affected thereby), (iii) the negotiation,announcement, execution, delivery, consummation or pendency hereof or of the Transactions, any litigation relating to this Agreementor the Transactions or any action or inaction by ACS or its Affiliates contemplated by or required by this Agreement, (iv) changes inaccounting principles, (v) matters disclosed or referred to in the Schedules, or (vi) attack, outbreak, hostility, terrorist activity, act ordeclaration of war or act of public enemies or other geopolitical event (so long as the ACS Assets or the ACS Wireless Activities arenot disproportionately affected thereby).(h) Governmental Orders. No Governmental Authority shall have enacted, issued, promulgated, enforced or enteredany order, writ, judgment, injunction, decree, stipulation, determination or award that is in effect and has the effect of making theTransactions illegal, otherwise restraining or prohibiting consummation of such Transactions or causing such Transactions to berescinded following completion thereof.(i) Deliveries. ACS and ACS Wireless shall have made or shall stand willing and able to make all the deliveries setforth in Section 9.2.(j) Absence of Proceedings. There shall not be pending or overtly threatened in writing any Proceeding (i) challengingor seeking to restrain or prohibit the Transactions or seeking to obtain from GCI or GCI Wireless or any of their respective Affiliates,in connection with the Transactions, any damages that are material in relation to GCI or GCI Wireless (as the case may be) taken aswhole, (ii) seeking to prohibit or limit the ownership or operation by GCI or GCI Wireless of any material portion of the ACS WirelessActivities, the ACS Assets or the ACS AWN Interest or to compel GCI or GCI Wireless to dispose of or hold separate any materialportion of the ACS Wireless Activities, the ACS Assets or the ACS AWN Interest, in each case as a result of the Transactions, or(iii) seeking to impose any conditions or restrictions that, individually or in the aggregate, in the reasonable judgment of GCI or GCIWireless, would materially impair (or would reasonably be expected to materially impair) the ability of GCI or GCI Wireless toconsummate the Transactions or would reasonably be expected to have a material adverse effect on the economic benefits to GCI orGCI Wireless arising therefrom.(k) Bankruptcy Event. No Bankruptcy Event shall have occurred and be continuing with respect to any member of theACS Group.(l) Transaction Opinion. GCI shall have received the Transaction Opinion.(m) Financing. GCI shall have obtained financing to fund the Purchase Price on terms and conditions that, taken as awhole, are not substantially less favorable to GCI than commercially reasonable terms and conditions that could be obtained on thedate hereof, assuming that GCI has not entered into a transaction after the date hereof that materially adversely alters its ability to securefinancing as contemplated above. For purposes of this Section 8.2(m), a draw on an existing revolving credit facility (to the extentpermitted on the date hereof) shall not be considered to be entering into a transaction after the date hereof.51BUS_RE/5486564.1(n) Customer Billing Arrangements. GCI shall have entered into a reasonably acceptable arrangement with CommSoftand any other Person necessary to provide billing and customer care to Subscribers after Closing, and GCI shall have been providedwith the necessary customer information to enable GCI to bill Subscribers.(o) CDMA Network Transition. ACS shall be ready, willing and able to transfer to GCI the operation of the CDMACore Network, subject to ACS continuing to maintain and support the Post-Close Systems.(p) Release. ACS shall have delivered a release, or evidence that a release will, upon Closing, be provided, of allLiens disclosed in the lien searches described in Section 8.2(e) that are on (i) the ACS AWN Interest (other than Permitted Liensdescribed in clause (g) of the definition of Permitted Liens), or (ii) the ACS Assets.SECTION 9.CLOSING AND CLOSING DELIVERIES9.1 Time and Place of Closing. Subject to (i) the satisfaction or, to the extent permissible by Legal Requirements, waiver (bythe Parent for whose benefit the closing condition is imposed), of the closing conditions described in Section 8, and (ii) the provisionsof Section 10, the closing of the Transactions (the “Closing”) will take place at the offices of GCI, 2550 Denali Street, Suite 1000,Anchorage, Alaska, at 10:00 a.m., local time, on the second Business Day following the date on which each of the conditions set forthin Section 8 is satisfied or waived by the Party entitled to waive such condition (except for any conditions that by their nature can onlybe satisfied on the Closing Date, but subject to the satisfaction of such conditions or waiver by the Party entitled to waive suchconditions) (the “Closing Date”), or on such other date or at such other location as shall otherwise be mutually agreed upon by theParents.9.2 Deliveries by ACS and ACS Wireless. Prior to or on the Closing Date, and subject to the terms of Section 7.9, ACS andACS Wireless shall deliver to GCI and GCI Wireless the following, in form and substance reasonably satisfactory to GCI Parent andits counsel:(a) Transfer Documents. Duly executed Instruments of Assignment and the Assignment of Ownership Interest andduly executed bills of sale, assignments of the Assumed Contracts and such other transfer documents which shall be sufficient to vestgood and marketable title to the ACS Assets in the name of GCI and the ACS AWN Interest in the name of GCI Wireless, free andclear of any Liens (except for in the case of any ACS Asset the Permitted Liens);(b) Consents. The original of each Consent which has been obtained relating to the ACS Group;(c) Secretary’s Certificate. A certificate dated as of the Closing Date, executed by the Secretary or Assistant Secretaryof each of ACS and ACS Wireless: (i) certifying that the resolutions, as attached to such certificate, were duly adopted by suchPerson’s board of directors and shareholders (if required), authorizing and approving the execution of this Agreement and theconsummation of the Transactions and that such resolutions remain in full force and effect; and (ii) providing, as attachments thereto,such Person’s certificate or articles of incorporation, bylaws52BUS_RE/5486564.1or operating agreement and a certificate of good standing certified by an appropriate state official, and, if appropriate, certificates ofqualification as a foreign corporation certified by an appropriate state official of those states in which such Person conducts the ACSWireless Activities, all certified by such state officials as of a date not more than 20 days before the Closing Date and by such Person’sSecretary or Assistant Secretary as of the Closing Date;(d) Network Information. The Network Information set forth on Schedule 9.2; and(e) Contracts, Activities Records, Etc. Copies of all Assumed Contracts other than consumer Subscriber Contracts,and all files and records included in the ACS Assets.9.3 Deliveries by GCI. On the Closing Date, and subject to the terms of Section 7.9, GCI shall deliver to ACS and ACSWireless the following, in form and substance reasonably satisfactory to ACS and its counsel:(a) Assumption Agreements. Duly executed Instruments of Assumption, pursuant to which GCI shall assume andundertake to perform obligations arising after the Effective Time under the Assumed Contracts; and(b) Secretary’s Certificate. A certificate dated as of the Closing Date, executed by the Secretary or Assistant Secretaryof each of GCI and GCI Wireless: (i) certifying that the resolutions, as attached to such certificate, were duly adopted by such Person’sboard of directors and shareholders (if required), authorizing and approving the execution of this Agreement and the consummation ofthe Transactions and that such resolutions remain in full force and effect; and (ii) providing, as attachments thereto, such Person’sarticles of incorporation, bylaws and a certificate of good standing certified by an appropriate state official, all certified by such stateofficial as of a date not more than 20 days before the Closing Date and by such Person’s Secretary or Assistant Secretary as of theClosing Date.SECTION 10.RIGHTS OF THE PARTIES ON TERMINATION OR BREACH10.1 Termination Rights. This Agreement may be terminated prior to the Closing:(a) At any time by mutual written consent of both ACS and GCI;(b) By ACS if (A) there have been one or more breaches by GCI Parent, GCI or GCI Wireless of any of theirrepresentations, warranties, covenants or agreements contained herein or in any Ancillary Agreement that have not been waived byACS and would result in the failure to satisfy any of the conditions set forth in Section 8.1 (Conditions to Obligations of ACS Group)and such breaches have not been cured within ten days after written notice thereof has been received by GCI Parent or (B) any of theconditions set forth in Section 8.1 (Conditions to Obligations of ACS Group) has become incapable of being satisfied on or before theOutside Date and has not been waived by ACS; provided, however, that in each case that ACS and its Affiliates are not in materialbreach of any of their representations, warranties, covenants or agreements contained herein or in any Ancillary Agreement;53BUS_RE/5486564.1(c) By GCI if (A) there have been one or more breaches by ACS or ACS Wireless of any of their representations,warranties, covenants or agreements contained herein or in any Ancillary Agreement that have not been waived by GCI and wouldresult in the failure to satisfy any of the conditions set forth in Section 8.2 (Conditions to Obligations of GCI and GCI Wireless) andsuch breaches have not been cured within ten days after written notice thereof has been received by ACS or (B) any of the conditionsset forth in Section 8.2 (Conditions to Obligations of GCI and GCI Wireless) has become incapable of being satisfied on or before theOutside Date and has not been waived by GCI; provided, however, that in each case that GCI and its Affiliates are not in materialbreach of any of their representations, warranties, covenants or agreements contained herein or in any Ancillary Agreement;(d) By either Party if the Closing hereunder has not taken place within five months of the Signing Date (the “OutsideDate”); provided, however, that neither ACS nor GCI shall be permitted to terminate this Agreement pursuant to this Section 10.1(d) ifthe failure to consummate the Closing by such date results from material breach by such other Party or any of its Affiliates of any oftheir representations, warranties, covenants or agreements contained herein or in any Ancillary Agreement.In the event of termination by ACS or GCI pursuant to this Section 10.1, written notice thereof shall promptly be given to the otherParty, setting forth the clause of this Section 10.1 pursuant to which such Party is terminating and the facts giving rise to such Party’stermination right in reasonable detail, and this Agreement and the Transactions shall be terminated, without further action by any Party.Upon such termination: (i) if no Party is in intentional or willful material breach of any provision of this Agreement, the Parties shallnot have any further liability to each other; or (ii) if any Party shall be in intentional or willful material breach of any provision of thisAgreement, the other Parties shall have all rights and remedies available at law or equity.10.2 Specific Performance. Prior to termination of this Agreement, in the event any Party refuses to perform under theprovisions of this Agreement, monetary damages alone will not be adequate. The other Parties shall therefore be entitled, in addition toany other remedies that may be available, including money damages, to obtain specific performance of the terms of this Agreement. Inthe event of an action by any of the Parties to obtain specific performance of the terms of this Agreement, each other Party herebywaives the defense that there is an adequate remedy at law.SECTION 11.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION11.1 Affiliates. The indemnification rights provided in this Section 11 shall, in any instance, extend to any Affiliate of eitherParent although any indemnification claims by such Persons shall be made by and through the Claimant.11.2 Survival. All representations, warranties and pre‑Closing covenants contained in this Agreement shall be deemedcontinuing representations, warranties and covenants, and shall survive the Closing Date for 18 months following the Closing Datewith respect to any claim by the other Parent as the Person claiming indemnification (the “Claimant”) that a Parent or an Affiliate54BUS_RE/5486564.1thereof that is a Party (the “Indemnifier”) has breached its representations or warranties contained in this Agreement or failed tocomply with its pre‑Closing covenants contained herein; provided, however, that the representations and warranties set forth inSection 4.3(b) regarding title to the ACS Assets and Section 4.13 regarding title to the ACS AWN Interest shall survive for the periodof the applicable statute of limitations, and those set forth in Section 4.8 (Environmental Law) relating to the pre-Closing period shallsurvive for five years following the Closing Date. In clarification of the foregoing, the Parties confirm that the covenants herein to beperformed following the Closing, including under this Section 11, shall survive in each instance until 18 months after the requiredperformance thereof. Any investigations by or on behalf of any Party or Knowledge of any Party shall not constitute a waiver by suchParty of its rights to enforce any representation, warranty or covenant contained herein of the other Parties.11.3 Indemnification by ACS. Subsequent to the Closing, and regardless of any investigation made at any time by or onbehalf of any Party, or any information or Knowledge any other Party may have, ACS as Indemnifier shall indemnify and hold GCIParent, as Claimant, harmless against and with respect to, and shall reimburse GCI Parent for:(a) Any and all expenses, losses, liabilities or damages (“Damages”) resulting from any untrue representation, breachof warranty or nonfulfillment of any covenant contained herein by ACS or its Affiliates;(b) Any and all obligations or liabilities of ACS and its Affiliates not assumed by GCI or GCI Wireless pursuant to theterms hereof;(c) Any and all Damages resulting from the ACS Wireless Activities or the ownership or operation of the ACS Assetsor the ownership of the ACS AWN Interest prior to the Effective Time, including any and all liabilities which relate to eventsoccurring prior to the Effective Time arising under the Assumed Contracts (other than Damages described in Section 11.3(e)), butexcluding any and all matters subject to the Continuing Indemnification Obligations;(d) (i) Any and all forfeitures, fines or monetary judgments (including voluntary contributions to the U.S. Treasurypaid pursuant to an FCC-approved Consent Decree or other settlement to which the FCC is a party) in excess of overpayments of HighCost Universal Service Support from the Universal Service Fund (each, a “Fine”) to the extent that any such Fine results from acts oromissions of any member of the ACS Group, including but not limited to deficiencies in the customer billing address, line type, linecount or other information provided by the ACS Group, rather than from acts or omissions by the Company;(ii) Any decrease in CETC Cash Flow from the ACS Wireless Activities due to failure to file any requiredreports necessary to maintain ACS’s eligibility to receive High Cost Universal Service Support, failure to cooperate with any FCC orUSAC required audit, including a Payment Quality Assurance review, or other investigation, or failure to respond to lawful process, ineach case before the Closing, except to the extent that such failure resulted from acts or omissions by the Company with respect toactions required of the Company by Exhibit F to the FNUA;55BUS_RE/5486564.1(e) Any and all Damages resulting from any Environmental Claims (regardless of whether any representation orwarranty contained in Section 4.8 is incorrect) related to the operation of any Leased Property prior to the Effective Time;(f) Any and all Damages resulting from any claim that a collective bargaining agreement or other contract with aUnion is binding upon GCI Parent or any of its Affiliates or imposes on GCI Parent or any of its Affiliates any duty to bargain withany Union to the extent such claim relates to any collective bargaining agreement or other contract with a Union by ACS or any of itsAffiliates; and(g) Any and all actions, suits, proceedings, claims, demands, assessments, judgments, reasonable costs and expenses,including reasonable legal fees and expenses, incident to any of the foregoing or reasonably incurred in investigating or attempting toavoid the same or to oppose the imposition thereof, or in enforcing this indemnity.11.4 Indemnification by GCI. Subsequent to the Closing, GCI Parent, GCI and GCI Wireless shall indemnify and hold ACSand ACS Wireless harmless against and with respect to, and shall reimburse ACS and ACS Wireless for:(a) Any and all Damages resulting from any untrue representation, breach of warranty or nonfulfillment of anycovenant contained herein by GCI or its Affiliates;(b) Any and all Damages resulting from (i) GCI’s operation or ownership of the ACS Assets or the ACS WirelessActivities on and after the Effective Time, including any and all liabilities arising under the Assumed Contracts (other than TransitionContracts and Assumed Leases) which relate to events occurring after the Effective Time, any and all liabilities arising underTransition Contracts which relate to events occurring on or after the Transition Completion Date and any and all liabilities arisingunder the Assumed Leases which relate to events occurring on or after the Assumed Leases Assumption Date, (ii) Assumed Liabilitiesand (iii) ownership of the ACS AWN Interest on and after the Effective Time;(c) If GCI makes an election pursuant to option (1) of Section 7.8(b), any and all Damages resulting from the transferto GCI by ACS of any such Assumed Contract prior to the receipt of the Consent required for the assignment thereof, contingent uponsuch Consent having been waived by GCI as a precondition to such assignment; and(d) Any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses, includingreasonable legal fees and expenses, incident to any of the foregoing or incurred in investigating or attempting to avoid the same or tooppose the imposition thereof, or in enforcing this indemnity.11.5 Procedure for Indemnification. The procedure for indemnification shall be as follows:(a) The Claimant, as the party claiming indemnification, shall give written notice to the Indemnifier of any claim,whether between or among Parties or brought by a Third Party,56BUS_RE/5486564.1within 20 days of receiving notice, or becoming aware, thereof and specifying (i) the factual basis for such claim (to the extent knownby the Claimant) and (ii) if known, the amount of the claim; provided that failure to give such notice within 20 days shall not constitutea defense to any claim for indemnification unless, and only to the extent that, such failure materially prejudices the Indemnifier exceptthat the Indemnifier shall not be liable for any expenses incurred during the period in which the Claimant failed to give such notice.Thereafter, the Claimant shall deliver to the Indemnifier, promptly following the Claimant’s receipt thereof, copies of all notices anddocuments (including court papers) received by the Claimant relating to the claim.(b) Following receipt of notice from the Claimant of a claim, the Indemnifier shall have 30 days to make suchinvestigation of the claim as the Indemnifier deems necessary or desirable. For the purposes of such investigation, the Claimant agreesto make available to the Indemnifier and/or its authorized representative(s) the information relied upon by the Claimant to substantiatethe claim. If the Claimant and the Indemnifier agree at or prior to the expiration of said 30 day period (or any mutually agreed uponextension thereof) to the validity and amount of such claim, the Indemnifier shall immediately pay to the Claimant the full amount ofthe claim. If the Claimant and the Indemnifier do not agree within such period (or any mutually agreed upon extension thereof), theClaimant may seek a remedy in accordance with the applicable provisions of this Agreement.(c) With respect to any claim by a Third Party as to which a Claimant is claiming indemnification hereunder, theIndemnifier shall have the right, at its own expense, to participate in or assume control of the defense of such claim with counselselected by the Indemnifier, and the Claimant shall cooperate fully with the Indemnifier, subject to reimbursement for actual out-of-pocket expenses incurred by the Claimant as the result of a request by the Indemnifier. Such cooperation shall include the retention and(upon the Indemnifier’s request) the provision to the Indemnifier of records and information that are reasonably relevant to such ThirdParty claim, and making employees available at such times and places as may be reasonably necessary to defend against such ThirdParty claim for the purpose of providing additional information, explanation or testimony in connection with such Third Party claim. Ifthe Indemnifier elects to assume control of the defense of any Third Party claim, the Indemnifier shall have the right to assert anycounterclaims or defenses available to Claimant against such Third Party, and the Claimant shall have the right to participate in thedefense of such claim at its own expense and to employ counsel (not reasonably objected to by the Indemnifier), at its own expense,separate from the counsel employed by the Indemnifier, it being understood that the Indemnifier shall control such defense; providedthat if the Claimant shall have reasonably concluded that separate counsel is required because a conflict of interest would otherwiseexist, the Claimant shall have the right to select separate counsel to participate in the defense of such action on its behalf, at the expenseof the Indemnifier. If the Indemnifier does not elect to assume control or otherwise participate in the defense of any Third Party claim,it shall be bound by the results obtained by the Claimant with respect to such claim. If the Indemnifier assumes the defense of a ThirdParty claim in accordance with this Section 11.5(c), the Indemnifier shall not be liable to the Claimant for any legal expensessubsequently incurred by the Claimant in connection with the defense thereof. Whether or not the Indemnifier assumes the defense of aThird Party claim, the Claimant shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party claimwithout the Indemnifier’s57BUS_RE/5486564.1prior written consent, and the Indemnifier shall not have any indemnification obligation with respect to any settlement, compromise ordischarge effected without its prior written consent.11.6 Limitations. The Indemnifier’s obligations to indemnify the Claimant pursuant to Section 11.3 or 11.4 shall be subject tothe following limitations:(a) The Claimant shall be entitled to indemnification only for those Damages arising with respect to any claim as towhich Claimant has given the Indemnifier written notice within the appropriate time period set forth in Section 11.2 hereof for suchclaim.(b) Claimant’s Damages sought to be recovered under Section 11.3 or 11.4 hereof shall be net of any insuranceproceeds actually received by Claimant with respect to the events giving rise to such Damages. If the incurrence or payment of anysuch Damages makes allowable to the Indemnified Party any deduction, amortization, exclusion from income or other allowance (a“Tax Benefit”) which would not, but for such adjustment, be allowable, then the indemnification payment to the Claimant under thisSection 11 shall be an amount equal to (i) the amount otherwise due but for this sentence, minus (ii) the amount of Tax savings actuallyrealized by the Claimant as a result of the Tax Benefit in the Tax year in which the Damages were incurred (a “Tax Savings”). If andto the extent that subsequent to any payment of Damages by any Indemnifier to a Claimant hereunder, such Claimant receivesinsurance proceeds or realizes a Tax Savings with respect to the events giving rise to such Damages, which proceeds or Tax Savingswould have been netted against such Damages if they had been received prior to the Indemnifier’s payment of such Damages, then theClaimant shall remit such insurance proceeds or the amount of such Tax Savings to Indemnifier to the extent such proceeds or amountwould have been netted against such Damages.(c) ACS shall not be liable for indemnification under Section 11.3(a), 11.3(e) or 11.3(g) (to the extent relating toSection 11.3(a) or 11.3(e)) (other than with respect to claims for indemnification based upon, arising out of, with respect to or byreason of fraud, intentional misrepresentation or other willful misconduct, any breach of any covenant, or any pre-Closing liabilities ofthe ACS Group that are not Assumed Liabilities (the “Basket/Cap Exclusions”)), until the aggregate amount of all indemnificationpayments for which ACS is liable in respect of indemnification under such Sections (other than with respect to claims forindemnification based upon the Basket/Cap Exclusions) exceeds $1,000,000 (the “Basket”), in which event ACS shall be required topay all indemnification payments including the amount of the Basket.(d) The aggregate amount of all indemnification payments for which ACS shall be liable pursuant to Section 11.3(a),11.3(e) and 11.3(g) (to the extent relating to Section 11.3(a) or 11.3(e)) (other than with respect to claims for indemnification basedupon, arising out of, with respect to or by reason of the Basket/Cap Exclusions) shall not exceed $50,000,000.(e) The Parties agree that the amount of Damages attributable to a breach of the representation contained in Section 4.5that no Consent is required for the assignment or transfer of any Postpaid Subscriber Contract shall be $350 multiplied by the numberof Wireless lines with respect to such Postpaid Subscriber Contract; provided, however, that the amount of such Damages shall be $0 if(i) such Contract was listed on the Subscriber Contract Consent List and a Non-58BUS_RE/5486564.1Election Notice is not delivered by GCI with respect to such Postpaid Subscriber Contract or (ii) such Contract is not terminated by theSubscriber within six months after the Closing Date.(f) No member of the ACS Group shall be liable for any Damages to GCI or any of its Affiliates with respect to anyloss or reduction in CETC Cash Flow if ACS and its Affiliates have complied with their obligations with respect to such CETC CashFlow in this Agreement.11.7 Taxes. In the event of any inconsistency between the provisions of Section 7.3 and the provisions of this Section 11, theprovisions of Section 7.3 shall govern.11.8 Treatment of Indemnification Payments. All indemnity payments made pursuant to this Section 11 shall be treated for allTax purposes as adjustments to the Purchase Price to the extent permitted by applicable Legal Requirements.11.9 Exclusive Remedy. Subject to Section 10.2, the Parties acknowledge and agree that, following the Closing, their soleand exclusive remedy with respect to any and all claims (other than claims arising from fraud on the part of a Party hereto inconnection with the Transactions) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein,shall be pursuant to the indemnification provisions set forth in Section 7.3 or this Section 11. In furtherance of the foregoing, eachParty hereby waives, to the fullest extent permitted under law, any and all rights, claims and causes of action for any breach of anyrepresentation, warranty, covenant, agreement or obligation set forth herein it may have against the other Parties hereto and theirAffiliates and each of their respective representatives arising under or based upon any law, except pursuant to the provisions set forth inSection 7.3 or this Section 11. Nothing in this Section 11.9 shall limit any Person’s right to seek and obtain any equitable relief towhich any Person shall be entitled or to seek any remedy on account of any fraud.SECTION 12.MISCELLANEOUS12.1 Notices. All notices, demands and requests required or permitted to be given under the provisions of this Agreement shallbe (i) in writing, (ii) sent by email as a portable document format (PDF) file, delivered by personal delivery, or sent by commercialdelivery service or certified mail, return receipt requested, (iii) deemed to have been given on the date sent by email as a portabledocument format (PDF) file with receipt confirmed, the date of personal delivery, or the date set forth in the records of the deliveryservice or on the return receipt, and (iv) addressed as follows:If to the Company:The Alaska Wireless Network, LLCc/o General Communication, Inc.2550 Denali Street, Suite1000Anchorage, Alaska 99503Attention: CEOEmail: whughes@GCI.com59BUS_RE/5486564.1with a copy (which shall not alone constitute notice) to: Sherman & Howard L.L.C. 633 17th Street, Suite 3000 Denver, CO 80202 Attention: Steven D. Miller Email: smiller@shermanhoward.comIf to GCI Parent, GCI orGCI Wireless:General Communication, Inc. 2550 Denali Street, Suite 1000 Anchorage, Alaska 99503 Attention: General Counsel Email: tpidgeon@gci.comwith a copy (which shall not alone constitute notice) to: Sherman & Howard L.L.C. 633 17th Street, Suite 3000 Denver, CO 80202 Attention: Steven D. Miller Email: smiller@shermanhoward.comIf to ACS or ACS Wireless:Alaska Communications Systems Group, Inc.600 Telephone AvenueAnchorage, Alaska 99503Attention: GeneralCounselEmail: leonard.steinberg@acsalaska.comwith a copy (which shall not alone constitute notice) to: Sidley Austin LLP787 Seventh AvenueNew York, New York 10019Attention: Irving L. Rotter Gabriel SaltarelliEmail: irotter@sidley.com gsaltarelli@sidley.comor to any such other or additional Persons and addresses as the Person to whom notice is to be provided may from time to timedesignate in a writing delivered in accordance with this Section 12.1.12.2 Benefit and Binding Effect. This Agreement shall inure solely to the benefit of the Parties, without conferring on anyother Person any rights of enforcement or other rights. No Party may assign this Agreement without the prior written consent of theother Parties. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permittedassigns.60BUS_RE/5486564.112.3 Entire Agreement. This Agreement together with the Ancillary Agreements and all exhibits and schedules hereto orthereto, and all documents and certificates delivered by the Parties contemporaneously and in connection herewith, or to be deliveredby the Parties pursuant hereto or in connection herewith, collectively represent the entire understanding and agreement between theParties with respect to the subject matter hereof. This Agreement together with the Ancillary Agreements supersede all priornegotiations, letters of intent or other writings between the Parties with respect to the subject matter hereof, and cannot be amended,supplemented or modified except by a written agreement which makes specific reference to this Agreement or an AncillaryAgreement, as the case may be, and which is signed by the Party against which enforcement of any such amendment, supplement ormodification is sought.12.4 Waiver of Compliance; Consents. Except as otherwise provided in this Agreement, any failure of any Party to complywith any obligation, representation, warranty, covenant, agreement or condition herein may be waived by the Party entitled to thebenefits thereof only by a written instrument signed by the Party granting such waiver, but such waiver or failure to insist upon strictcompliance with such obligation, representation, warranty, covenant, agreement or condition shall not operate as a waiver of, orestoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of anyParty, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in thisSection 12.4.12.5 Severability. If any provision hereof or the application thereof to any Person or circumstance shall be invalid orunenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstancesshall not be affected thereby and shall be enforced to the greatest extent permitted by applicable Legal Requirements.12.6 Prevailing Party. If any Party commences any Proceeding against another Party to interpret or enforce any of the terms ofthis Agreement as a result of an alleged breach by the other Party of any terms hereof, the nonprevailing Party shall pay to theprevailing Party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of suchProceeding (including at any appellate level).12.7 No Consequential or Indirect Damages. Except to the extent payable to a Third Party with respect to indemnificationclaims under Section 11.5(c), in no event shall any Party be liable under this Agreement to another Party for any punitive, incidental,indirect, special or consequential damages, including any damages for business interruption, loss of use, revenue or profit, whetherarising out of breach of contract, tort (including negligence) or otherwise, regardless of whether such damages were foreseeable andwhether or not the breaching Party was advised of the possibility of such damages.12.8 Governing Law. This Agreement shall be governed, construed and enforced in accordance with the laws of the State ofDelaware, without regard to conflicts of law principles thereunder.12.9 Selection of Forum; Venue; Service of Process. The Parties hereby irrevocably submit in any Proceeding arising out ofor relating to this Agreement or any Transactions to the61BUS_RE/5486564.1exclusive jurisdiction of the United States District Court for the District of Alaska or if jurisdiction is not available therein thejurisdiction of any court of the State of Alaska, and waive any and all objections to such jurisdiction or venue that they may have underthe laws of any state or country, including any argument that jurisdiction, sites and/or venue are inconvenient or otherwise improper.Each Party further agrees that process may be served upon such Party in any manner authorized under the laws of the United States orAlaska, and waives any objections that such Party may otherwise have to such process.12.10 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTEDBY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION DIRECTLY ORINDIRECTLY ARISING OUT OF, INVOLVING OR OTHERWISE IN RESPECT OF THIS AGREEMENT, ANYANCILLARY AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH PARTY(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HASREPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OFLITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THEOTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE ANCILLARYAGREEMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONSIN THIS SECTION 12.10.12.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed anddelivered, shall be an original, and all of which counterparts together shall constitute one and the same fully executed instrument.Signature page follows62BUS_RE/5486564.1IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the date first above written.ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. By: /s/ David C. Eisenberg Name: David C. Eisenberg Title: Chief Revenue OfficerACS WIRELESS, INC. By: /s/ David C. Eisenberg Name: David C. Eisenberg Title: Chief Revenue OfficerGCI COMMUNICATION CORP. By: /s/ Peter Pounds Name: Peter Pounds Title: Chief Financial OfficerGCI WIRELESS HOLDINGS, LLC By: /s/ Peter Pounds Name: Peter Pounds Title: ManagerTHE ALASKA WIRELESS NETWORK, LLC By: /s/ Wilson Hughes Name: Wilson Hughes Title: CEO[Signature pages to Purchase and Sale Agreement]BUS_RE/5486564.1GENERAL COMMUNICATION, INC. By: /s/ Peter Pounds Name: Peter Pounds Title: Chief Financial Officer[Signature pages to Purchase and Sale Agreement]BUS_RE/5486564.1Exhibit 4.1AMENDED AND RESTATED 1986 STOCK OPTION PLANOFGENERAL COMMUNICATION, INC.Restated Effective September 26, 2014TAX/1567644.3TABLE OF CONTENTSPage1. PURPOSE AND TERM OF PLAN. 11.1. Restatement of Plan 11.2. Purpose 11.3. Term of Plan 12. DEFINITIONS AND CONSTRUCTION. 12.1. Definitions 12.2. Construction 43. ADMINISTRATION. 43.1. Administration by the Committee 43.2. Administration with Respect to Insiders 43.3. Committee Complying with Section 162(m) 43.4. Powers of the Committee 53.5. Indemnification 54. SHARES SUBJECT TO PLAN. 64.1. Maximum Number of Shares Issuable 64.2. Adjustments for Changes in Capital Structure 65. ELIGIBILITY AND AWARD LIMITATIONS. 75.1. Persons Eligible for Awards 75.2. Participation 75.3. Award Limits. 76. TERMS AND CONDITIONS OF OPTIONS. 76.1. Exercise Price 86.2. Exercisability and Term of Options 86.3. Special Vesting Provisions for Options 86.4. Payment of Exercise Price 96.5. Effect of Termination of Service. 96.6. Transferability of Options 116.7. Incentive Stock Option Limitations. 11iTAX/1567644.37. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. 127.1. Purchase Price 127.2. Vesting 127.3. Special Vesting Provisions for Restricted Stock Awards 127.4. Restrictions on Transfer 147.5. Voting Rights; Dividends and Distributions 147.6. Effect of Termination of Service 147.7. Exercise of Rights 148. STANDARD FORMS OF AWARD AGREEMENT. 148.1. Award Agreements 148.2. Authority to Vary Terms 149. COMPLIANCE WITH SECURITIES LAW. 1410. TAX WITHHOLDING. 1510.1. Tax Withholding in General 1510.2. Withholding in Shares 1511. AMENDMENT OR TERMINATION OF PLAN. 1512. MISCELLANEOUS PROVISIONS. 1612.1. Repurchase Rights 1612.2. Provision of Information 1612.3. Rights as Employee, Consultant or Director 1612.4. Rights as a Shareholder 1612.5. Other Awards and Compensation 1612.6. Fractional Shares 1612.7. Termination of Right of Action 1712.8. Severability 1712.9. Choice of Law 1712.10. Effectiveness of the Plan 1712.11. Option Exchange 17iiTAX/1567644.3Amended and Restated 1986 Stock Option Planof General Communication, Inc.Restated Effective September 26, 20141.PURPOSE AND TERM OF PLAN.1.1. Restatement of Plan. The Amended and Restated 1986 Stock Option Plan of General Communication, Inc. (the“Plan”), which previously was restated in its entirety effective as of June 27, 2005, the date of its approval by the shareholders of theCompany, hereby is restated again in its entirety by this document effective as of September 26, 2014 (the “Effective Date”).1.2. Purpose. The purpose of the Plan is to provide a special incentive to selected officers, directors and otheremployees of, and consultants and advisors to, General Communication, Inc. and its present and future subsidiaries in order to promotethe business of the Company and to encourage such persons to accept or continue their relationship with the Company. Accordingly,the Plan seeks to achieve this purpose by providing for Options and Restricted Stock Awards.1.3. Term of Plan. The Plan shall continue in effect until the earlier of its termination by the Board or the date onwhich all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under theterms of the Plan and the agreements evidencing Awards granted under the Plan have lapsed.2. DEFINITIONS AND CONSTRUCTION.2.1. Definitions. As used in the Plan, the following terms shall have the indicated meanings:“Award” means any Option or Restricted Stock Award granted under the Plan.“Award Agreement” means a written agreement between the Company and a Participant setting forth the terms,conditions and restrictions of the Award granted to the Participant. An Award Agreement may be an “Option Agreement” or a“Restricted Stock Agreement.”“Board” means the Board of Directors of the Company.“Change of Control” means the occurrence of any transaction (or series of related transactions) in which (i) anyperson (as such term is defined in Section 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than theCompany, any Subsidiary, anyTAX/1567644.3employee benefit plan sponsored by the Company or any Subsidiary shall become the owner, directly or indirectly, beneficially or ofrecord, of securities of the Company representing 50% or more of the combined voting power of the then outstanding securities of theCompany ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election ofdirectors, or (ii) the Company sells, leases, exchanges or otherwise transfers (in one transaction or a series of related transactions), butother than by way of merger or consolidation, of all or substantially all of the assets of the Company to any person (as such term isdefined in Section 13(d)(3) and 14(d)(2) of the Exchange Act).“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgatedthereunder.“Committee” means the Compensation Committee or other committee of the Board duly appointed to administerthe Plan and having such powers as shall be specified by the Board. If no committee of the Board has been appointed to administer thePlan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretionexercise any or all of such powers.“Company” means General Communication, Inc., an Alaska corporation, or any successor corporation thereto.“Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee ora member of the Board) to the Company or a Subsidiary.“Director” means a member of the Board.“Disability” means the permanent and total disability of the Participant, within the meaning of Section 22(e)(3)of the Code.“Employee” means any person treated as an employee (including an Officer or a member of the Board who isalso treated as an employee) in the records of the Company or a Subsidiary and, with respect to any Incentive Stock Option granted tosuch person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a member of theBoard nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan. The Company shalldetermine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and theeffective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’srights, if any, under the Plan as of the time of the Company’s determination, all such determinations by the Company shall be final,binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrarydetermination.2TAX/1567644.3“Exchange Act” means the Securities Exchange Act of 1934, as amended.“Fair Market Value” means the closing price of the Stock on the principal exchange on which the stock istraded or, if the Stock is not traded on an exchange, as reported by Nasdaq, or, if the closing price of the Stock is not reported byNasdaq, the fair market value of the Stock as determined by the Committee in good faith by any reasonable means, in each case, onsuch date of determination.“Incentive Stock Option” means an Option intended to be (as set forth in the applicable Award Agreement) andwhich qualifies as an incentive stock option within the meaning of Section 422(b) of the Code.“Insider” means an Officer, a Director or any other person whose transactions in Stock are subject to Section 16of the Exchange Act.“ISO-Qualifying Corporation” means the Company or a Subsidiary that is a “subsidiary corporation” of theCompany as defined in Section 424(f) of the Code.“Nonstatutory Stock Option” means an Option not intended to be (as set forth in the applicable AwardAgreement) an incentive stock option within the meaning of Section 422(b) of the Code.“Officer” means any person designated by the Board as an officer of the Company.“Option” means the right to purchase Stock at a stated price for a specified period of time granted to aParticipant pursuant to Section 6 of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option.“Participant” means any person to whom an Award may be granted pursuant to Section 5 of the Plan and towhom one or more Awards has been granted.“Restricted Stock” means Stock issued to a Participant subject to vesting conditions.“Restricted Stock Award” means an Award of Restricted Stock pursuant to Section 7 of the Plan.“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor ruleor regulation.“Section 162(m)”means Section 162(m) of the Code.3TAX/1567644.3“Securities Act” means the Securities Act of 1933, as amended.“Service” means a Participant’s employment or service with the Company or a Subsidiary, whether in thecapacity of an Employee, a Director or a Consultant. A Participant’s Service shall not be deemed to have terminated merely because ofa change in the capacity in which the Participant renders such Service or a change in the entity for which the Participant renders suchService, provided that there is no interruption or termination of the Participant’s Service. Furthermore, a Participant’s Service shall notbe deemed to have terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved bythe Company. However, if any such leave taken by a Participant exceeds 90 days, then on the 181st day following the commencementof such leave any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and insteadshall be treated thereafter as a Nonstatutory Stock Option, unless the Participant’s right to return to Service with the Company or aSubsidiary is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company orrequired by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Participant’s AwardAgreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the entityfor which the Participant performs Service ceasing to be a Subsidiary. Subject to the foregoing, the Company, in its discretion, shalldetermine whether the Participant’s Service has terminated and the effective date of such termination.“Stock” means the Class A common stock of the Company.“Subsidiary” means any entity in which the Company owns, directly or indirectly, more than 50% of the totalvoting power.“Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns stockpossessing more than 10% of the total combined voting power of all classes of stock of all ISO-Qualifying Corporations within themeaning of Section 422(b)(6) of the Code.“Vesting Conditions” mean those conditions established in Section 7 of the Plan prior to the satisfaction ofwhich shares subject to a Restricted Stock Award remain subject to forfeiture in favor of the Company upon the Participant’stermination of Service.2.2. Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning orinterpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and theplural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.3. ADMINISTRATION.4TAX/1567644.33.1. Administration by the Committee. The Plan shall be administered by the Committee. A majority of themembers of the Committee shall constitute a quorum, and all decisions, determinations and interpretations of the Committee shall bemade by a majority of such quorum. All questions of interpretation of the Plan or of any Award shall be determined by the Committee,and such determinations shall be final and binding upon all persons having an interest in the Plan or such Award. Any decision,determination or interpretation of the Committee under the Plan in writing signed by all members of the Committee shall be fullyeffective as if it had been made by a majority vote at a meeting duly called and held.3.2. Administration with Respect to Insiders. Unless otherwise determined by the Board, with respect toparticipation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 ofthe Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3.3.3. Committee Complying with Section 162(m). If the Company is a “publicly held corporation” within themeaning of Section 162(m), the Board may establish a Committee of “outside directors” within the meaning of Section 162(m) toapprove the grant of any Award which might reasonably be anticipated to result in the payment of employee remuneration that wouldotherwise exceed the limit on employee remuneration deductible for income tax purposes pursuant to Section 162(m).3.4. Powers of the Committee. In addition to any other powers set forth in the Plan and subject to the provisions ofthe Plan, the Committee shall have the full and final power and authority, in its discretion:(a) to determine the persons to whom, and the time or times at which, Awards shall be granted and the numberof shares of Stock to be subject to each Award;(b) to determine the type of Award granted and to designate Options as Incentive Stock Options orNonstatutory Stock Options;(c) to determine the Fair Market Value of shares of Stock or the fair market value of any other property;(d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical)and any shares acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares purchased pursuantto any Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any taxwithholding obligation arising in connection with an Award, including by the withholding or delivery of shares of Stock, (iv) thetiming, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the time of theexpiration of any Award,5TAX/1567644.3(vi) the effect of the Participant’s termination of Service on any of the foregoing, and (vii) all other terms, conditions and restrictionsapplicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan;(e) to approve one or more forms of Award Agreement;(f) to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicableto any Award or any shares acquired pursuant thereto;(g) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquiredpursuant thereto, including with respect to the period following a Participant’s termination of Service;(h) to decide all questions and settle all controversies and disputes which may arise in connection with thePlan; and(i) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any AwardAgreement, to interpret the Plan and to make all other determinations and take such other actions with respect to the Plan or any Awardas the Committee may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law.3.5. Indemnification. In addition to such other rights of indemnification as they may have as members of the Board orthe Committee or as officers or employees of the Company or any Subsidiary, members of the Board or the Committee shall beindemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connectionwith the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be aparty by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against allamounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by theCompany) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to whichit shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconductin duties; provided, however, that within 60 days after the institution of such action, suit or proceeding, such person shall offer to theCompany, in writing, the opportunity at its own expense to handle and defend the same.4. SHARES SUBJECT TO PLAN.4.1. Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximumaggregate number of shares of Stock that may be issued under the Plan shall be 15,700,000 and shall consist of authorized but unissuedor reacquired shares of Stock6TAX/1567644.3or any combination thereof. If an outstanding Award for any reason expires or is terminated or canceled without having been exercisedor settled in full, or if shares of Stock acquired pursuant to an Award subject to forfeiture are forfeited, the shares of Stock shall againbe available for issuance under the Plan. Shares of Stock withheld or reacquired by the Company in satisfaction of tax withholdingobligations pursuant to Section 10.2 shall not be deemed to have been issued pursuant to the Plan. If the exercise price of an Option ispaid by tender to the Company of shares of Stock owned by the Participant, the number of shares available for issuance under the Planshall be reduced by the net number of shares for which the Option is exercised.4.2. Adjustments for Changes in Capital Structure. In the event of a stock dividend, stock split or other change incorporate structure or capitalization affecting the Stock, the number and kind of shares of stock on which Awards may be grantedhereunder, the number and kind of shares of stock remaining subject to each Award outstanding at the time of such change and theAward price shall be appropriately adjusted by the Committee, whose determination shall be binding on all parties concerned. Subjectto any required action by the shareholders, if the Company shall be the surviving corporation in any merger or consolidation (otherthan a merger or consolidation in which the Company survives but its outstanding shares are converted into securities of anothercorporation or exchanged for other consideration), any Award granted hereunder shall pertain and apply to the securities which aholder of the number of shares of Stock then subject to the Award should have been entitled to receive. A dissolution or liquidation ofthe Company or a merger or consolidation in which the Company is not the surviving corporation or its outstanding shares are soconverted or exchanged shall cause every option hereunder to terminate, but at least 20 days prior to the effective date of any suchdissolution or liquidation (or if earlier any related sale of all or substantially all assets) or of any such merger or consolidation, theCommittee shall either make all Awards outstanding hereunder immediately exercisable or arrange that the successor or survivingcorporation, if any, grant replacement Awards. The Committee in its sole discretion, also may make such adjustments in the terms ofany Award to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate,including modification of any performance criteria or performance period applicable to such award.5. ELIGIBILITY AND AWARD LIMITATIONS.5.1. Persons Eligible for Awards. Awards may be granted only to Employees, Consultants and Directors. Forpurposes of the foregoing sentence, “Employees,” “Consultants” and “Directors” shall include prospective Employees, prospectiveConsultants and prospective Directors to whom Awards are granted in connection with written offers of an employment or otherservice relationship with the Company or a Subsidiary; provided, however, that no Stock subject to any such Award shall vest, becomeexercisable or be issued prior to the date on which such person commences Service.7TAX/1567644.35.2. Participation. Awards are granted solely at the discretion of the Committee. Eligible persons may be grantedmore than one Award.5.3. Award Limits.(a) Maximum Number of Shares Issuable as ISOs Under Plan. Subject to adjustment as provided in Section4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to the exercise of Incentive StockOptions is l3,200,000 shares, but no more than the total number of shares available for grant as Awards.(b) Maximum Number of Shares Issuable to any Individual Under Plan. The maximum number of sharesthat may be issued under Awards granted to any individual in a calendar year may not exceed 500,000 shares of Stock.(c) Section 162(m) Award Limits. The following limits shall apply to the grant of any Award if, at the time ofgrant, the Company is a “publicly held corporation” within the meaning of Section 162(m).(i) Options. Subject to adjustment as provided in Section 4.2, no Employee shall be granted within anyfiscal year of the Company one or more Options which in the aggregate are for more than 500,000 shares of Stock.(ii) Restricted Stock Awards. Subject to adjustment as provided in Section 4.2, no Employee shall begranted within any fiscal year of the Company one or more Restricted Stock Awards for more than 500,000 shares of Stock.6. TERMS AND CONDITIONS OF OPTIONS.Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in suchform as the Committee shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of theCompany unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Options may incorporate all or anyof the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:6.1. Exercise Price. The exercise price for each Option covering a share of Stock shall be determined by theCommittee and shall equal an amount that is not less than the Fair Market Value of a share of Stock on the effective date of the grant ofthe Option; provided, however, that no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per shareless than 110% of the Fair Market Value of a share of Stock on the effective date of the grant of the Option.8TAX/1567644.36.2. Exercisability and Term of Options. Options shall be exercisable at such time or times, or upon such event orevents, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and setforth in the Award Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expirationof 10 years after the effective date of grant of such Option, and (b) no Incentive Stock Option granted to a Ten Percent Owner shall beexercisable after the expiration of five years after the effective date of grant of such Option.6.3. Special Vesting Provisions for Options. Notwithstanding any other provision of this Plan or any AwardAgreement,(a) Vesting Upon Death or Disability. If a Participant’s Service terminates on or after September 26, 2014,because of the death or Disability of the Participant, any unvested Options held by the Participant as of the date of such terminationshall become fully (100%) vested effective as of the date of such termination, and shall be exercisable as provided in Section 6.4.(b) Vesting Upon Termination Without Cause or For Good Reason After Change of Control. If aParticipant’s Service is involuntarily terminated without Cause (as such term is defined in Section 6.5(a)(iv)), or if the Participant’sService is terminated by the Participant for Good Reason (as defined below), within 12 months after a Change of Control, anyunvested Options held by the Participant as of the date of such termination shall become fully (100%) vested as of the date of suchtermination, and shall be exercisable as provided in Section 6.4.(i) A Participant will be deemed to have terminated his or her Service for Good Reason if there occursone or more of the following conditions without the consent of the Participant, and the Participant provides written notice to theCommittee of the existence of such condition within 90 days after the initial occurrence of the condition, and the Company does notcure the condition within 60 days of such notice:(A) A material (10% or more) reduction in Participant’s base compensation;(B) A material diminution in the Participant’s authority, duties, responsibilities, or title asdetermined by the Committee; or(C) A material change in the geographic location (50 miles or more) at which the Participantregularly performs Services.9TAX/1567644.36.4. Payment of Exercise Price.(a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the exercise pricefor the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or in cash equivalent, (ii)by tender to the Company of shares of Stock owned by the Participant having a Fair Market Value not less than the exercise price; (iii)by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment tothe Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option(including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time bythe Board of Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) by such other consideration as may be approvedby the Committee from time to time to the extent permitted by applicable law, or (v) by any combination thereof. The Committee mayat any time or from time to time grant Options which do not permit all of the foregoing forms of consideration to be used in payment ofthe exercise price or which otherwise restrict one or more forms of consideration.(b) Limitations on Forms of Consideration.(i) Tender of Stock. Notwithstanding the foregoing, an Option may not be exercised by tender to theCompany of shares of Stock to the extent such tender would constitute a violation of the provisions of any law, regulation oragreement restricting the redemption of the Company’s stock. Unless otherwise provided by the Committee, an Option may not beexercised by tender to the Company of shares of Stock unless such shares either have been owned by the Participant for more than 6months or were not acquired, directly or indirectly, from the Company.(ii) Cashless Exercise. The Company reserves, at any and all times, the right, in the Company’s soleand absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by meansof a Cashless Exercise, including with respect to one or more Participants specified by the Company notwithstanding that suchprogram or procedures may be available to other Participants.6.5. Effect of Termination of Service.(a) Option Exercisability. Subject to earlier termination of the Option as otherwise provided herein and unlessotherwise provided by the Committee in the grant of an Option and set forth in the Award Agreement, an Option shall be exercisableafter a Participant’s termination of Service only during the applicable time period determined in accordance with this Section andthereafter shall terminate:10TAX/1567644.3(i) Disability. If the Participant’s Service terminates because of the Disability of the Participant, theOption, to the extent unexercised and exercisable on the date on which the Participant’s Service terminated, may be exercised by theParticipant (or the Participant’s guardian or legal representative) at any time prior to the expiration of 12 months after the date on whichthe Participant’s Service terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the AwardAgreement evidencing such Option (the “Option Expiration Date”).(ii) Death. If the Participant’s Service terminates because of the death of the Participant, the Option, tothe extent unexercised and exercisable on the date on which the Participant’s Service terminated, may be exercised by the Participant’slegal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time priorto the expiration of 12 months after the date on which the Participant’s Service terminated, but in any event no later than the OptionExpiration Date. The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within threemonths after the Participant’s termination of Service.(iii) Other Termination of Service. If the Participant’s Service terminates for any reason other thanDisability, death, or for Cause, the Option, to the extent unexercised and exercisable by the Participant on the date on which theParticipant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of 30 days after the date onwhich the Participant’s Service terminated, but in any event no later than the Option Expiration Date.(iv) Termination for Cause. If the Participant’s Service terminates for Cause, then all Options held bythe Participant as of such termination (whether or not exercisable) shall be terminated and canceled and the Participant shall have nofurther rights under this Plan. For purposes of this Section 6.5(a)(iv), “Cause” shall have the meaning ascribed thereto in anyemployment agreement with the Company or any Subsidiary to which such Participant is a party or, in the absence thereof, shallinclude but not be limited to an illegal or negligent action by the Participant that materially adversely affects the Company or anySubsidiary or, engaging in misconduct involving serious moral turpitude, or the failure or refusal to perform one’s duties andresponsibilities for any reason other than illness or incapacity; provided, however, that if such termination occurs within 12 monthsafter a Change of Control of the Company (as determined by the Committee, in its sole discretion), “cause” shall mean only a felonyconviction for fraud, misappropriation or embezzlement.(b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of an Optionwithin the applicable time periods set forth in Section 6.5(a) is prevented by the provisions of Section 9 below, the Option shall remainexercisable until three11TAX/1567644.3months (or such longer period of time as determined by the Committee, in its discretion) after the date the Participant is notified by theCompany that the Option is exercisable, but in any event no later than the Option Expiration Date.(c) Extension if Participant Subject to Section 16(b). Notwithstanding the foregoing, if a sale within theapplicable time periods set forth in Section 6.5(a) of shares acquired upon the exercise of the Option would subject the Participant tosuit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the 10th dayfollowing the date on which a sale of such shares by the Participant would no longer be subject to such suit, (ii) the 190th day after theParticipant’s termination of Service, or (iii) the Option Expiration Date.6.6. Transferability of Options. Except as otherwise provided in this Section 6.6, during the lifetime of theParticipant, an Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative. Prior to theissuance of shares of Stock upon the exercise of an Option, the Option shall not be subject in any manner to anticipation, alienation,sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’sbeneficiary, except transfer by will or by the laws of descent and distribution. Notwithstanding the foregoing, the Participant, with theapproval of the Committee, may transfer the Option for no consideration to or for the benefit of the Participant’s immediate family(including, without limitation, to a trust for the benefit of the Participant’s immediate family or to a partnership or limited liabilitycompany for one or more members of the Participant’s immediate family), subject to such limits as the Committee may establish, andthe transferee shall remain subject to all the terms and conditions applicable to the Option prior to such transfer. The foregoing right totransfer the Option shall apply to the right to consent to amendments to this Plan and the Award Agreement and, in the discretion of theCommittee, shall also apply to the right to transfer ancillary rights associated with the Option. The term “immediate family” shall meanthe Participant’s spouse, parents, children, stepchildren, adoptive relationships, sisters, brothers and grandchildren (and, for thispurpose, shall also include the Participant). In addition, notwithstanding the foregoing, to the extent permitted by the Committee, in itsdiscretion, and set forth in the Award Agreement evidencing such Option, a Nonstatutory Stock Option shall be assignable ortransferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement underthe Securities Act. Any attempted assignment, transfer, pledge, hypothecation or other disposition of any option contrary to theprovisions of the Plan, and any levy of any attachment or similar process upon an option will be null and void and without effect, andthe Committee may, in its discretion, upon the happening of any such event, terminate an option forthwith.6.7. Incentive Stock Option Limitations.12TAX/1567644.3(a) Persons Eligible. An Incentive Stock Option may be granted only to a person who, on the effective date ofgrant, is an Employee of an ISOQualifying Corporation. Any person who is not an Employee of an ISO-Qualifying Corporation onthe effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option. An Incentive StockOption granted to a prospective Employee upon the condition that such person become an Employee of an ISOQualifying Corporationshall be deemed granted effective on the date such person commences Service with an ISO-Qualifying Corporation, with an exerciseprice determined as of such date in accordance with Section 6.1.(b) Fair Market Value Limitation. To the extent that options designated as Incentive Stock Options (grantedunder all stock option plans of the Company, including the Plan) become exercisable by a Participant for the first time during anycalendar year for stock having a Fair Market Value greater than $100,000, the portion of such options which exceeds such amountshall be treated as Nonstatutory Stock Options. For purposes of this Section, options designated as Incentive Stock Options shall betaken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time theoption with respect to such stock is granted. If the Code is amended to provide for a limitation different from that set forth in thisSection, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options asrequired or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as aNonstatutory Stock Option in part by reason of the limitation set forth in this Section, the Participant may designate which portion ofsuch Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised theIncentive Stock Option portion of the Option first. Upon exercise, shares issued pursuant to each such portion shall be separatelyidentified.7. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.Restricted Stock Awards shall be evidenced by Award Agreements specifying the number of shares of Stock subject tothe Award, in such form as the Committee shall from time to time establish. No Restricted Stock Award or purported Restricted StockAward shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. AwardAgreements evidencing Restricted Stock Awards may incorporate all or any of the terms of the Plan by reference and shall complywith and be subject to the following terms and conditions:7.1. Purchase Price. No monetary payment (other than applicable tax withholding) shall be required as a condition ofreceiving shares of Stock pursuant to a Restricted Stock Award, the consideration for which shall be services actually rendered to theCompany or a Subsidiary or for its benefit. Notwithstanding the foregoing, the Participant shall furnish consideration in the form ofcash or past services rendered to the Company or a Subsidiary or for13TAX/1567644.3its benefit having a value not less than the par value of the shares of Stock subject to such Restricted Stock Award.7.2. Vesting. Shares of Restricted Stock issued pursuant to any Restricted Stock Award shall be subject to the vestingconditions described in the Award Agreement.7.3. Special Vesting Provisions for Restricted Stock Awards. Notwithstanding any other provision of this Plan orany Award Agreement,(a) Vesting Upon Death or Disability. If a Participant’s Service terminates on or after September 26, 2014,because of the death or Disability of the Participant, any shares of Restricted Stock held by the Participant as of the date of suchtermination shall become fully (100%) vested effective as of the date of such termination.(b) Vesting Upon Termination Without Cause or For Good Reason After Change of Control. If aParticipant’s Service is involuntarily terminated without Cause (as such term is defined in Section 6.5(a)(iv)), or if the Participant’sService is terminated by the Participant for Good Reason (as defined in Section 6.3(b)), within 12 months after a Change of Control,any shares of Restricted Stock held by the Participant as of the date of such termination shall become fully (100%) vested as of the dateof such termination.(c) Vesting Upon Retirement. If a Participant’s Service is terminated by the Participant for Retirement, anyshares of Restricted Stock held by the Participant as of the date of such termination shall become 100% vested as of the date of suchRetirement provided that the following conditions are satisfied:(i) A Participant will be deemed to have terminated his or her Service for Retirement upon satisfactionof all of the following conditions:(A) The Participant must be at least age 60; and(B) The Retirement must have been approved in writing by the chief financial officer (CFO) ofthe Company; and(C) the Participant’s Service must continue until the date of Retirement approved by the CFO,and the Participant may be required to continue such Service to the Retirement date determined by the CFO and/oruntil a certain project is completed, as determined by the CFO.(ii) In addition to the conditions set forth above, in order to be eligible for the accelerated vesting of theRestricted Stock after the Participant’s Retirement, the Participant must not, from the date of Retirement for a period of two (2) yearsafter such Retirement,14TAX/1567644.3directly or indirectly, for the Participant or others, own, manage, operate, control, be employed by, consult with, assist or otherwiseengage or participate in or permit the Participant’s skill, knowledge, experience or reputation to be used in connection with, theownership, management, operation or control of, any Competitor (as defined below); provided, however, that nothing contained hereinshall prohibit the Participant from making passive investments as long as the Participant does not beneficially own more than threepercent (3%) of the equity interests of a Competitor listed on a national securities exchange or publicly traded on a nationallyrecognized over-the-counter market (except through a passive pooled investment fund such as a hedge fund or mutual fund) (the “Non-compete Covenant”). For purposes of this Section, “Competitor” shall mean any business or enterprise that competes for or with theCompany's business or the business of any affiliate of the Company in any state in the United States in which the Company doesbusiness, as such is constituted as of the date of the Participant’s termination of employment.(A) This Section 7.3(c)(ii) shall survive the expiration or termination of the Plan for any reason.(B) If the Participant violates the Non-Compete Covenant, to the extent permitted by applicablelaw, the Participant will repay to the Company the number of shares of Restricted Stock that vested as of or after thedate of the Participant’s termination of Services or, if of greater value than the number of such shares, an amountequal to the value of the shares of Restricted Stock that vested after the Participant’s termination of Service datebased on the value of such shares as of each such vesting date (whether the vesting of such shares occurred prior orsubsequent to the competitive activity). The existence of any unrelated claims which the Participant may haveagainst the Company or any of its affiliates, whether under this Plan or otherwise, will not be a defense to theenforcement by the Company or its affiliates of any of their rights under this Section 7.3(c)(ii).7.4. Restrictions on Transfer. Until shares subject to a Restricted Stock Award have vested, such shares may not besold, exchanged, transferred, pledged, assigned or otherwise disposed of by the Participant. Upon request by the Company, eachParticipant shall execute an agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shallpromptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on suchcertificates of appropriate legends evidencing any such transfer restrictions.7.5. Voting Rights; Dividends and Distributions. Except as provided in this Section and any Award Agreement, theParticipant shall have all of the rights of a shareholder of the Company with respect to unvested shares of Restricted Stock, includingthe right to vote such15TAX/1567644.3shares and to receive all dividends and other distributions paid with respect to such shares. However, in the event of a dividend ordistribution paid in shares of Stock or any other adjustment made upon a change in the capital structure of the Company as described inSection 4.2, any and all new, substituted or additional securities or other property (other than normal cash dividends) to which theParticipant is entitled by reason of such unvested shares shall be immediately subject to the same vesting conditions as the unvestedshares with respect to which such dividends or distributions were paid or adjustments were made.7.6. Effect of Termination of Service. Unless otherwise provided in the Award Agreement, if a Participant’s Serviceterminates for any reason, whether voluntarily or involuntarily (including the Participant’s death or disability), then the Participant shallforfeit to the Company any shares of Restricted Stock which remain unvested as of the date of the Participant’s termination of Service.7.7. Exercise of Rights. All rights with respect to a Restricted Stock Award granted to a Participant hereunder shallbe exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.8. STANDARD FORMS OF AWARD AGREEMENT.8.1. Award Agreements. Each Award shall comply with and be subject to the terms and conditions set forth in theappropriate form of Award Agreement approved by the Committee and as amended from time to time. Any Award Agreement may bein form or forms, including electronic media, as the Committee may approve from time to time.8.2. Authority to Vary Terms. The Committee shall have the authority from time to time to vary the terms of anystandard form of Award Agreement either in connection with the grant or amendment of an individual Award or in connection withthe authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised oramended standard form or forms of Award Agreement are not inconsistent with the terms of the Plan.9. COMPLIANCE WITH SECURITIES LAW.The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with allapplicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange ormarket system upon which the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to anAward unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respectto the shares issuable pursuant to the Award or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to theAward may be issued in16TAX/1567644.3accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of theCompany to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to benecessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure toissue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, theCompany may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance withany applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.10. TAX WITHHOLDING.10.1. Tax Withholding in General. The Company shall have the right to deduct from any and all payments madeunder the Plan, or to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a CashlessExercise of an Option, to make adequate provision for, the federal, state, local and foreign taxes, if any, required by law to be withheldby the Company or a Subsidiary with respect to an Award or the shares acquired pursuant thereto. The Company shall have noobligation to deliver shares of Stock, to release shares of Stock from an escrow established pursuant to an Award Agreement, or tomake any payment in cash under the Plan until such tax withholding obligations have been satisfied by the Participant.10.2. Withholding in Shares. The Company shall have the right, but not the obligation, to deduct from the shares ofStock issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number ofwhole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholdingobligations of the Company and its Subsidiaries. The Fair Market Value of any shares of Stock withheld or tendered to satisfy anysuch tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates.11. AMENDMENT OR TERMINATION OF PLAN.The Company may amend, suspend or terminate the Plan at any time. However, without the approval of theCompany’s shareholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued underthe Plan (except by operation of the provisions of Section 4.2), (b) no change in the class of persons eligible to receive Incentive StockOptions, and (c) no other amendment of the Plan that would require approval of the Company’s shareholders under any applicablelaw, regulation or rule. No amendment, suspension or termination of the Plan shall affect any then outstanding Award unless expresslyprovided by the Committee. In any event, no amendment, suspension or termination of the Plan may adversely affect any thenoutstanding Award without the consent of the Participant unless expressly authorized by the Plan17TAX/1567644.3or necessary to comply with any applicable law, regulation or rule. The Committee may at any time or times amend any outstandingAward for the purpose of satisfying the requirements of any changes in applicable laws or regulations and, with the consent of theParticipant, the Committee may make such modifications or amendments to any outstanding Award as it shall deem advisable.12. MISCELLANEOUS PROVISIONS.12.1. Repurchase Rights. Stock issued under the Plan may be subject to one or more repurchase options, or otherconditions and restrictions as determined by the Committee in its discretion at the time the Award is granted. The Company shall havethe right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons asmay be selected by the Company. Upon request by the Company, each Participant shall execute any agreement evidencing suchtransfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificatesrepresenting shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any suchtransfer restrictions.12.2. Provision of Information. Each Participant shall be given access to information concerning the Companyequivalent to that information generally made available to the Company’s common shareholders.12.3. Rights as Employee, Consultant or Director. No person, even though eligible pursuant to Section 5, shallhave a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or anyAward granted under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director or interfere with orlimit in any way any right of the Company or a Subsidiary to terminate the Participant’s Service at any time. To the extent that anEmployee of a Subsidiary receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean thatthe Company is the Employee’s employer or that the Employee has an employment relationship with the Company.12.4. Rights as a Shareholder. A Participant shall have no rights as a shareholder with respect to any shares coveredby an Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of aduly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which therecord date is prior to the date such shares are issued, except as provided in Section 4.2 or another provision of the Plan.12.5. Other Awards and Compensation. The Plan shall not restrict the authority of the Company, acting directly orby authorization to any committee, for proper corporate purposes, to grant or assume stock options or replacements or substitutionstherefore, other than under the Plan, whether in connection with any acquisition or otherwise, and with respect to any employee18TAX/1567644.3or other person, or to award bonuses or other benefits to Participants under the Plan in connection with exercises under the Plan orotherwise or to maintain or establish other compensation or benefit plans or practices.12.6. Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise or settlementof any Award.12.7. Termination of Right of Action. Every right of action arising out of or in connection with the Plan by or onbehalf of the Company or any Subsidiary, or by any shareholder of the Company against any past, present or future member of theBoard or against any employee, or by an employee (past, present or future) against the Company or any Subsidiary shall, irrespectiveof the place where an action may be brought and irrespective of the place or residence of any such shareholder, director or employee,cease and be barred by the expiration of three years from the date of the act or omission with respect to which such right of action isalleged to have arisen.12.8. Severability. If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegalor unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legalityand enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby.12.9. Choice of Law. Except to the extent governed by applicable federal law, the validity, interpretation,construction and performance of the Plan and each Award Agreement shall be governed by the laws of the State of Alaska, withoutregard to its conflict of law rules.12.10. Effectiveness of the Plan. The Plan originally became effective on December 20, 1986, and has beenamended and restated, the most recent amendment and restatement of which shall, subject to approval by the shareholders of theCompany at a meeting of shareholders duly called and held, or by written consent duly given, be effective on the Effective Date.12.11. Option Exchange. Notwithstanding any other provision of the Plan to the contrary, the Board of Directors ofthe Company or the Company’s Compensation Committee may provide for, and the Company may implement, a one-time-onlyOption exchange offer, pursuant to which certain outstanding Options could, at the election of the Participant, be tendered to theCompany for cancellation in exchange for the issuance of a lesser amount of Restricted Stock, provided that such one-time-onlyOption exchange offer is commenced within 12 months of the date that this Section 12.11 is approved by the shareholders of theCompany in accordance with Section 11 of the Plan.19TAX/1567644.3IN WITNESS WHEREOF, General Communication, Inc. has executed this Amended and Restated 1986 Stock Option Planof General Communication, Inc. effective as of September 26, 2014.GENERAL COMMUNICATION, INC.By: /s/ Peter Pounds Title: Secretary 20TAX/1567644.3Exhibit 4.2SECURITYHOLDER AGREEMENTby and betweenGENERAL COMMUNICATION, INC.andSEARCHLIGHT ALX, L.P.dated as ofDecember 4, 2014W/2422986BUS_RE/5483002.4TABLE OF CONTENTSPageARTICLE I DEFINITIONS1Section 1.1Definitions 1Section 1.2Terms Generally. 4Section 1.3Closing. 4Section 1.4Actions Prior to Investor Closing. 4Section 1.5Post-Closing Actions. 4ARTICLE II DIRECTOR NOMINATION RIGHTS5Section 2.1Investor Nominees 5Section 2.2Company Nomination 5Section 2.3Removal 5Section 2.4Vacancies 5ARTICLE III TRANSFER OF SECURITIES6Section 3.1General Restrictions on Transfer. 6Section 3.2Right of First Refusal. 7ARTICLE IV REPRESENTATIONS AND WARRANTIES9Section 4.1Representations and Warranties of Both Parties. 9Section 4.2Representations and Warranties of the Investor. 9ARTICLE V STANDSTILL11Section 5.1Standstill 11ARTICLE VI ADJUSTMENTS12Section 6.1Adjustments to Exercise Price for Cash Dividend. 12Section 6.2Agreement for Reorganization Event 12Section 6.3Adjustments to SARs for Merger or Consolidation 12ARTICLE VII TERM AND TERMINATION13Section 7.1Termination 13Section 7.2Effect of Termination 13ARTICLE VIII MISCELLANEOUS13Section 8.1Confidentiality. 13Section 8.2Expenses 14Section 8.3Notices 14Section 8.4Effectiveness 15Section 8.5Interpretation. 15Section 8.6Headings 15Section 8.7Severability 15Section 8.8Agreement 15Section 8.9No Third Party Beneficiaries 15Section 8.10Amendment and Modification; Waiver 16Section 8.11Governing Law; Submission to Jurisdiction; Service of Process; Waiver of Jury Trial. 16Section 8.12Specific Performance 17Section 8.13Counterparts 17iBUS_RE/5483002.4SECURITYHOLDER AGREEMENTThis Securityholder Agreement (this “Agreement”), dated as of December 4, 2014 is entered into by and between GeneralCommunication, Inc., an Alaska corporation (the “Company”) and Searchlight ALX, L.P., a Delaware limited partnership (the“Investor”).RECITALSWHEREAS, on the date hereof, the Company has entered into a Purchase and Sale Agreement, among the Company, AlaskaCommunications Systems Group, Inc., ACS Wireless, Inc., GCI Communication Corp., GCI Wireless Holdings, LLC and The AlaskaWireless Network, LLC (the “Purchase Agreement”).WHEREAS, at the Closing (as defined in the Purchase Agreement), the Investor will acquire the following securities fromCompany (collectively, the “Securities”): (a) that certain Unsecured Promissory Note Due 2023, in the principal amount of$75,000,000, in the form attached hereto as Exhibit A (the “Note”); and (b) 3,000,000 SARs, as such term is defined in that certainStock Appreciation Rights Agreement, in the form attached hereto as Exhibit B (the “SAR Agreement”) (subject to adjustment asprovided herein or in the SAR Agreement).WHEREAS, each of the Investor and the Company deems it in its respective best interests to set forth in this Agreement eachparty’s rights and obligations in connection with the Investor’s acquisition of the Securities.NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:BUS_RE/5483002.4ARTICLE I DEFINITIONSSection 1.1 Definitions. Capitalized terms used herein and not otherwise defined will have the meanings set forth in thisArticle I.“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, iscontrolled by, or is under common control with, such Person, including any director or officer of such Person or any owner of Class BCommon Stock . The term “control” (including the terms “controlled by” and “under common control with”) means the possession,directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through theownership of voting securities, by contract or otherwise.“Agreement” has the meaning set forth in the preamble.“Applicable Law” means all applicable provisions of (a) constitutions, treaties, statutes, laws (including the common law),rules, regulations, decrees, ordinances, codes, proclamations, declarations or orders of any Governmental Authority, (b) any consentsor approvals of any Governmental Authority and (c) any orders, decisions, advisory or interpretative opinions, injunctions, judgments,awards, decrees of, or agreements with, any Governmental Authority.“Board” has the meaning set forth in Section 2.1.“Business Day” means a day other than a Saturday, Sunday or any other day on which commercial banks located inAnchorage, Alaska are authorized or required by Law to be closed for business.“Closing” has the meaning set forth in the Recitals.“Capital Stock” means the Common Stock and the Class B common stock of the Company and any securities issued inrespect thereof, or in substitution therefor, in connection with any Reorganization Event (the “Class B Common Stock”).“Common Stock” means the Class A common stock of the Company and any securities issued in respect thereof, or insubstitution therefor, in connection with any Reorganization Event.“Company” has the meaning set forth in the preamble.“Director” has the meaning set forth in Section 2.1.“Encumbrance” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory orother), option, security interest, mortgage, right of first refusal or restriction of any kind, including any restriction on use, voting,transfer, receipt of income or exercise of any other attribute of ownership.2BUS_RE/5483002.4“Government Approval” means any authorization, consent, approval, waiver, exception, variance, order, exemption,publication, filing, declaration, concession, grant, franchise, agreement, permission, permit, or license of, from or with anyGovernmental Authority, the giving notice to, or registration with, any Governmental Authority or any other action in respect of anyGovernmental Authority.“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or anyagency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmentalregulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authorityhave the force of law), or any arbitrator, court or tribunal of competent jurisdiction.“Information” has the meaning set forth in Section 8.1.“Investor” has the meaning set forth in the preamble.“Investor Closing” has the meaning set forth in Section 1.3.“Investor Director” has the meaning set forth in Section 2.1.“Investor Nominee” has the meaning set forth in Section 2.1.“Note” has the meaning set forth in the Recitals.“Offered Securities” has the meaning set forth in Section 3.2(a).“Offering Notice” has the meaning set forth in Section 3.2(b).“Permitted Transferee” means with respect to the Investor, any Affiliate of the Investor and any bank, lending institution orother financing source to whom the Investor pledges or assigns a security interest in the Securities as collateral for loans or other creditextended to the Investor by such bank, lending institution or other financing source. For all purposes of this Agreement, for theavoidance of doubt, Searchlight Capital, L.P. shall be an Affiliate of the Investor and a Permitted Transferee hereunder. In addition, forclarification, while the Investor shall be permitted to pledge or assign a security interest in the Securities as collateral for loans or othercredit extended, any such secured party shall not be considered to be a Permitted Transferee upon the foreclosure or sale in lieu offoreclosure of any such secured interest, which transfer shall be subject to all of the transfer restrictions set forth in Article III.“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority,unincorporated organization, trust, association or other entity.“Purchase Agreement” has the meaning set forth in the Recitals.3BUS_RE/5483002.4“Representative” means, with respect to any Person, any and all directors, officers, employees, partners, members, investors,consultants, financial advisors, counsel, accountants and other agents of such Person.“ROFR Notice” has the meaning set forth in Section 3.2(d).“ROFR Notice Period” has the meaning set forth in Section 3.2(d).“SAR Agreement” has the meaning set forth in the Recitals.“SEC” means the Securities and Exchange Commission.“Securities” has the meaning set forth in the Recitals.“Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulationsissued thereunder, as in effect at the time.“Third Party Purchaser” means any Person who, immediately prior to the contemplated transaction, is not the Investor or aPermitted Transferee.“Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, eithervoluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer,assignment, pledge, encumbrance, hypothecation or similar disposition of, any Securities owned by a Person or any interest (includinga beneficial interest) in any Securities owned by a Person; provided, however, that for all purposes of this Agreement, the Investor shallbe permitted to pledge or assign a security interest in the Securities to a Permitted Transferee as collateral for loans or other creditextended to the Investor by such Permitted Transferee.“Treasury Regulations” means the Treasury Regulations (including temporary or proposed regulations) promulgated underthe Internal Revenue Code of 1986, as amended from time to time (including corresponding provisions of succeeding regulations).Section 1.2 Terms Generally. The definitions set forth or referenced in Section 1.1 apply equally to both the singular andplural forms of the terms defined. Any pronoun includes the corresponding masculine, feminine and neuter forms, as the contextrequires. The words “include,” “includes” and “including” will be deemed to be followed by the phrase “without limitation.” The word“or” is not exclusive. The words “will” and “shall” are used interchangeably and are intended to have, and will be deemed to have, thesame meaning. The words “herein,” “hereof,” “hereby” and “hereunder” and words of similar import refer to this Agreement in itsentirety and not to any part of this Agreement unless the context otherwise requires. All references to Articles and Sections will bedeemed references to Articles and Sections of this Agreement unless the context otherwise requires. Any references to any agreementor other document or instrument or to any statute or regulation are to it as amended and supplemented from time to time (and, in thecase of a statute or regulation, to any successor provisions, and to any rules and regulations promulgated thereunder), unless the context4BUS_RE/5483002.4otherwise requires. Any reference to a “day” or number of “days” (without the explicit qualification of “business”) will be interpretedas a reference to a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular calendarday, and such calendar day is not a Business Day, then such action or notice will be deferred until, or may be taken or given on, thenext Business Day.Section 1.3 Closing. The Investor’s obligations to consummate the transactions contemplated by this Agreement shall besubject to the Closing having occurred (the consummation of such transactions, the “Investor Closing”). At the Investor Closing, theInvestor agrees to purchase the Note and the SARs for an aggregate purchase price of Seventy Five Million Dollars ($75,000,000),which purchase price shall be payable in the lawful money of the United States of America to the Company by wire transfer to suchaccount or accounts as the Company may direct by written notice to the Investor. The Company will deliver executed copies of theNote and the SAR Agreement to the Investor at the Investor Closing and the Investor will deliver an executed copy of the SARAgreement to the Company.Section 1.4 Actions Prior to Investor Closing. The Company and Investor agree to cooperate in good faith to determine andagree upon, prior to the Investor Closing, the relative fair market values of the Note and the SARs for purposes of the application ofTreasury Regulation Section 1.1273-2(h), and the Company and Investor agree not to take any position on any tax return or otherwisefor income tax purposes inconsistent with such fair market values.Section 1.5 Post-Closing Actions. To the extent the Investor receives SARs and/or Common Stock pursuant to the SARAgreement: (a) the Company and the Investor shall negotiate in good faith and enter into a customary registration rights agreementwith respect to such Common Stock; and (b) the Company shall use reasonable best efforts to cause the Compensation Committee ofthe Board to approve the issuance of such SARs and/or Common Stock in a manner designed to exempt the issuance from Section16(b) of the Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3(d)(1) promulgated thereunder.ARTICLE II DIRECTOR NOMINATION RIGHTSSection 2.1 Investor Nominees. The Investor acknowledgers that the business and affairs of the Company are managedthrough a board of directors (the “Board”) currently consisting of nine members (each, a “Director”). From time to time and at anytime after the Investor Closing and for so long as any principal amount remains outstanding under the Note (or until such right isotherwise terminated as provided for in this Agreement), the Investor (or, if applicable, a Permitted Transferee that is an Affiliate of theInvestor) shall be entitled to nominate one Director to serve on the Board (the “Investor Nominee” and, if elected to the Board, the“Investor Director”), such Investor Nominee to initially be Eric Zinterhofer. The Board shall expand its size to ten members or suchnumber as necessary to accommodate the Investor Nominee.Section 2.2 Company Nomination. At each meeting of the Company’s stockholders at which the election of the class IIDirectors is to be considered, the Company shall nominate5BUS_RE/5483002.4the Investor Nominee so designated by the Investor for election to the Board by the Company’s stockholders and use reasonable bestefforts to solicit proxies from the Company’s stockholders in favor of the election of the Investor Nominee). The Company shall usereasonable best efforts to cause the Investor Nominee to be elected to the Board (including voting all unrestricted proxies in favor ofthe election of such Investor Nominee and including recommending approval of such Investor Nominee’s appointment to the Board)and shall not take any action designed to diminish the prospects of such Investor Nominee of being elected to the Board.Section 2.3 Removal. The Investor Director appointed pursuant to this Article II shall continue to hold office until the nextannual meeting of the stockholders of the Company at which the class II Directors are to be elected and until his or her successor iselected and qualified in accordance with this Section 2.3 and the bylaws of the Company, unless such Investor Director is earlierremoved from office by the Investor (or, if applicable, a Permitted Transferee that is an Affiliate of the Investor) (in which event theInvestor shall cause the Investor Director to resign from the Board) or at such time as such Investor Director’s death, resignation,retirement or disqualification. The Company shall use all reasonable best efforts to ensure that any Investor Director is removed only ifso directed in writing by the Investor, unless otherwise required by this Section 2.3 or applicable law.Section 2.4 Vacancies. In the event of a vacancy on the Board resulting from the death, disqualification, resignation,retirement or termination of the term of office of the Investor Director, the Company shall use reasonable best efforts to cause theBoard to fill such vacancy or new directorship with a representative designated by the Investor (or, if applicable, a PermittedTransferee that is an Affiliate of the Investor) to serve until the next annual or special meeting of the stockholders at which the class IIDirectors are to be elected (and at such meeting, such representative, or another representative designated by such holders, will benominated to be elected to the Board in the manner set forth in Section 2.1). If the Investor (or, if applicable, a Permitted Transfereethat is an Affiliate of the Investor) fails or declines to fill the vacancy, then the directorship shall remain open until such time as theInvestor elects to fill it with a representative designated hereunder. Any representative designated by the Investor (or, if applicable, aPermitted Transferee that is an Affiliate of the Investor) to fill such a vacancy must be a principal or senior executive officer of theInvestor or any of its Affiliates and must have sufficient industry expertise and professional qualifications to enable such representativeto make meaningful and significant contributions to the Board, as determined in good faith by the Company.ARTICLE III TRANSFER OF SECURITIESSection 3.1 General Restrictions on Transfer.(a) At any time when any of the Securities remain outstanding, the Investor acknowledges and agrees that it (or any PermittedTransferee) will not voluntarily or involuntarily Transfer any of the Securities, in whole or in part, without the prior written consent ofthe Company except (i) to a Permitted Transferee in accordance with the procedures set forth in this Section 3.1 or (ii) in accordancewith the procedures set forth in Section 3.2. For the6BUS_RE/5483002.4avoidance of doubt, all issued and outstanding Securities, if Transferred pursuant to this Section 3.1 or Section 3.2, may only beTransferred together and in their entirety.(b) A Transfer of all of the then issued and outstanding Securities by the Investor to a Permitted Transferee at any time shallnot be subject to Section 3.2.(c) In the event of a Transfer or attempted Transfer of any of the Securities in violation of this Agreement, the rights of theInvestor set forth in Article II will immediately be of no further force or effect and the Investor shall promptly cause the InvestorDirector to resign from the Board.(d) Prior to the consummation of any Transfer of the Securities by the Investor that is permitted pursuant to the terms andconditions of this Agreement (other than a pledge of, or assignment of a security interest in, the Securities as collateral for loans orother credit extended to the Investor by a Permitted Transferee), the Investor will cause the transferee thereof to execute and deliver tothe Company an agreement to be bound by the terms and conditions of this Agreement, which shall be in form and substancereasonably acceptable to the Company. Except as set forth in this Section 3.1, upon any Transfer by the Investor of all of its thenissued and outstanding Securities in accordance with the terms of this Agreement, the transferee thereof will be substituted for, and willassume all the rights and obligations under this Agreement of, the Investor; provided, that if the Transfer is not made to a PermittedTransferee, then any such transferee shall not be entitled to enforce the rights of the Investor set forth in Article II which willimmediately be of no further force or effect and the Investor shall promptly cause the Investor Director to resign from the Board.(e) Notwithstanding any other provision of this Agreement, the Investor agrees that it will not, directly or indirectly, Transferthe Securities (i) except as permitted under the Securities Act and other applicable federal or state securities laws, and then, if requestedby the Company, only upon delivery to the Company of an opinion of counsel in form and substance satisfactory to the Company tothe effect that such Transfer may be effected without registration under the Securities Act, (ii) if it would cause the Company or any ofits subsidiaries to be required to register as an investment company under the Investment Company Act of 1940, as amended, or (iii) ifit would cause the assets of the Company or any of its subsidiaries to be deemed plan assets as defined under the Employee RetirementIncome Security Act of 1974 or its accompanying regulations or result in any “prohibited transaction” thereunder involving theCompany. In any event, the Company may refuse the Transfer to any Person if such Transfer would have a material adverse effect onthe Company as a result of any regulatory or other restrictions imposed by any Governmental Authority.(f) Any Transfer or attempted Transfer of the Securities in violation of this Agreement will be null and void, no such Transferwill be recorded on the Company’s books and the purported transferee in any such Transfer will not be treated (and the purportedtransferor will continue be treated) as the owner of the Securities for all purposes of this Agreement.(g) Notwithstanding anything contained herein to the contrary or otherwise, the Investor may at any time pledge or assign asecurity interest in the Securities to secure loans or7BUS_RE/5483002.4other credit extended to the Investor by a Permitted Transferee; provided that no such pledge or assignment shall release the Investorfrom any of its obligations hereunder or substitute any such pledgee or assignee for the Investor as a party hereto. In addition, forclarification, while the Investor shall be permitted to pledge or assign a security interest in the Securities as collateral for loans or othercredit extended, any such secured party shall not be considered to be a Permitted Transferee upon the foreclosure or sale in lieu offoreclosure of any such secured interest, which transfer shall be subject to all of the transfer restrictions set forth in Article III. In noevent shall any such secured party be entitled to enforce the rights of the Investor set forth in Article II and upon any such foreclosureor sale in lieu of foreclosure of any such secured interest, the rights of the Investor set forth in Article II will immediately be of nofurther force or effect and the Investor shall promptly cause the Investor Director to resign from the Board.Section 3.2 Right of First Refusal.(a) If at any time during the period from the Investor Closing until the fourth (4th) anniversary of the Investor Closing, theInvestor owning all of the then issued and outstanding Securities receives a bona fide offer from any Third Party Purchaser to purchaseall of such Securities (the “Offered Securities”) owned by the Investor and the Investor desires to Transfer the Offered Securities(other than Transfers that are permitted by Section 3.1), then the Investor must first offer the Offered Securities to the Company inaccordance with the provisions of this Section 3.2.(b) The Investor shall, within five Business Days of receipt of the offer from the Third Party Purchaser, give written notice(the “Offering Notice”) to the Company stating that it has received a bona fide offer from a Third Party Purchaser and specifying:(i) that the Investor intends to Transfer all (but not less than all) of the then issued and outstanding Securities and theexact number of then issued and outstanding Securities to be Transferred by the Investor;(ii) the identity of the Third Party Purchaser; and(iii) the total purchase price for the Offered Securities (such cost to be payable solely in cash) and the other materialterms and conditions of the Transfer.The Offering Notice will constitute the Investor’s offer to Transfer the Offered Securities to the Company, which offer will beirrevocable until the end of the ROFR Notice Period.(c) By delivering the Offering Notice, the Investor represents and warrants to the Company that: (i) the Investor has full right,title and interest in and to the Offered Securities, (ii) the Investor has all the necessary power and authority and has taken all necessaryaction to Transfer such Offered Securities as contemplated by this Section 3.2, and (iii) the Offered Securities are free and clear of anyand all Encumbrances other than those arising as a result of or under the terms of this Agreement.8BUS_RE/5483002.4(d) Upon receipt of the Offering Notice, the Company will have ten Business Days (the “ROFR Notice Period”) to elect topurchase all (and not less than all) of the Offered Securities by delivering a written notice (a “ROFR Notice”) to the Investor statingthat it will purchase such Offered Securities on the terms specified in the Offering Notice, provided that the Company will have aperiod of up to 60 days in order to close any such purchase, which period may be extended for a reasonable time not to exceed 150total days to the extent reasonably necessary to obtain any Government Approvals. Any ROFR Notice will be binding upon deliveryand irrevocable by the Company.(e) Subject to Section 3.2(f), if the Company does not deliver a ROFR Notice during the ROFR Notice Period, the Companywill be deemed to have waived all of its rights to purchase the Offered Securities under this Section 3.2.(f) If the Company does not deliver a ROFR Notice in accordance with Section 3.2(d), the Investor may, during the 60 dayperiod immediately following the expiration of the ROFR Notice Period, which period may be extended for a reasonable time not toexceed 150 total days to the extent reasonably necessary to obtain any Government Approvals, Transfer all (and not less than all) ofthe Offered Securities to the Third Party Purchaser on terms and conditions no more favorable to the Third Party Purchaser than thoseset forth in the Offering Notice. If the Investor does not Transfer all of the Offered Securities within such period, or if such Transfer isnot consummated within such period, the rights provided hereunder will be revived and the Offered Securities may not be Transferredto the Third Party Purchaser unless the Investor sends a new Offering Notice in accordance with, and otherwise complies with, thisSection 3.2.(g) At the closing of any Transfer to the Company pursuant to this Section 3.2, the Investor will deliver to the Company thepromissory note and agreements representing the Offered Securities to be sold (if any), accompanied by such assignment instrumentsand other documents as are reasonably necessary to reflect the transfer and assignment of the Securities to the Company against receiptof the purchase price therefor from the Company by certified or official bank check or by wire transfer of immediately available funds.Notwithstanding the failure of the Investor to deliver any such assignment instruments and other documents, at the closing of anyTransfer to the Company, the Company shall for all purposes be deemed to be the record and beneficial owner of the Securities and theInvestor shall have no further right, title or interest to such Securities.ARTICLE IV REPRESENTATIONS AND WARRANTIESSection 4.1 Representations and Warranties of Both Parties. The parties represent and warrant to each other, as of thedate hereof and as of the Investor Closing, as follows:(a) Each party represents and warrants to that other that (i) it has full corporate power and authority to execute and deliver thisAgreement, the SAR Agreement and the Note, to perform its obligations hereunder and thereunder and to consummate the transactionscontemplated hereby and thereby and (ii) the execution and delivery of this Agreement, the SAR9BUS_RE/5483002.4Agreement and the Note, the performance of the obligations hereunder and thereunder and the consummation of the transactionscontemplated hereby and thereby, have been duly authorized by all requisite corporate action and each party has duly executed anddelivered this Agreement.(b) Each party represents and warrants to the other that the execution, delivery and performance of this Agreement, the SARAgreement and the Note and the consummation of the transactions contemplated hereby and thereby, require no action by or in respectof, or filing with, any Governmental Authority.(c) Each party represents and warrants to the other that the execution, delivery and performance by the Investor and theCompany (as applicable) of this Agreement, the SAR Agreement and the Note and the consummation of the transactions contemplatedhereby and thereby do not (i) conflict with or result in any violation or breach of any provision of any of the organizational documentsof the Investor or the Company (as applicable), (ii) conflict with or result in any violation or breach of any provision of any ApplicableLaw or (iii) require any consent or other action by any Person under any provision of any material agreement or other instrument towhich the Investor or the Company (as applicable) is a party.(d) Each party represents and warrants to the other that this Agreement constitutes, and each of the SAR Agreement, theSARs and the Note will constitute when executed and/or delivered (as applicable) at the Investor Closing, a legal, valid and bindingobligation, enforceable against each applicable party and its successors and permitted assigns in accordance with its terms except asmay be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).Section 4.2 Representations and Warranties of the Investor. The Investor represents and warrants to the Company, as ofthe date hereof and as of the Investor Closing, as follows:(a) The Company has made available to Investor an opportunity to ask questions of, and receive answers from, theCompany’s Representatives and any other Person acting on their behalf, concerning the operations, financial status and investmentrisks of the Company and its Affiliates and to obtain any additional information Investor desires, to the extent the Company possessessuch information or can acquire it without unreasonable effort or expense, and subsequently, Investor has examined and has had theopportunity to examine, prior to the date of this Agreement, all information material to an understanding of the Company and itsbusiness, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities andExchange Commission (“SEC”) on March 26, 2014 and the Company’s Quarterly Reports on Form 10-Q for the quarters endedMarch 31, 2014, June 30, 2014 and September 30, 2014 that were filed with the SEC on May 8, 2014, August 7, 2014 and November6, 2014, respectively. Investor represents that it has internet access to all future SEC filings made by the Company and agrees that eachsuch filing will be deemed to have been delivered to it. Investor further acknowledges that it has been actively involved in thenegotiation of the transactions contemplated by the Purchase Agreement and has had the10BUS_RE/5483002.4opportunity to review the Purchase Agreement and obtain all information concerning the transactions contemplated by the PurchaseAgreement that the Investor desires.(b) Investor: (i) is an “accredited investor” within the meaning of Section 501(d) of the rules promulgated under the SecuritiesAct; and (ii) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks ofan investment in the Company;(c) understands that an interest in the Securities is illiquid, that the Securities issued hereunder have not been registered underthe Securities Act, and that the Securities are nontransferable except in accordance with the terms of this Agreement;(d) acknowledges that no general solicitation or general advertising (including communications published in any newspaper,magazine or other broadcast) has been received by it and that no public solicitation or advertisement with respect to the offering of theSecurities has been made to it;(e) understands that no securities administrator of any state has made any finding or determination relating to the advisabilityor fairness of the terms under which the Securities are granted. Any representation to the contrary may be a criminal offense;(f) acknowledges that the Securities (and, to the extent not covered by a registration rights agreement, the Common Stock thatmay be issued upon exercise of the SARs) have not been and will not be registered under the Securities Act or the securities laws ofany state and cannot be offered or sold by Investor unless subsequently so registered or unless exemptions from the registrationrequirements of the Securities Act and all applicable state securities laws are available for the transaction;(g) The Securities (and the shares of Common Stock that may be issued upon exercise of the SARs) are being acquired byInvestor for Investor’s own account for investment and not for other persons and not with a view to resale or distribution;(h) Investor is aware that the Company and its counsel will rely on the representations and warranties provided by Investor inissuing the Securities; and(i) Other than the SAR Agreement and the Note described herein, Investor has not entered into or agreed to be bound by anyother agreements or arrangements of any kind with any other party with respect to the Securities (and the shares of Common Stock thatmay be issued upon exercise of the SARs), including agreements or arrangements with respect to the acquisition or disposition of theSecurities (and the shares of Common Stock that may be issued upon exercise of the SARs) (whether or not such agreements andarrangements are with the Company or any other stockholder of the Company).ARTICLE V STANDSTILL11BUS_RE/5483002.4Section 5.1 Standstill. Unless approved in advance in writing by the Board, the Investor agrees that neither it nor any of itsRepresentatives acting on behalf of or in concert with the Investor will, from and after the Investor Closing until none of the Securitiesare owned by the Investor or its Affiliates, directly or indirectly:(a) make any public statement or proposal to the board of directors of any of the Company, any of the Company’sRepresentatives or any of the Company’s stockholders (other than the Investor and its Affiliates) regarding, or make any publicannouncement, proposal or offer (including any “solicitation” of “proxies” as such terms are defined or used in Regulation 14A of theSecurities Exchange Act of 1934, as amended) with respect to, or otherwise solicit, seek or offer to effect (including, for the avoidanceof doubt, indirectly by means of communication with the press or media) (i) any business combination, merger, tender offer, exchangeoffer or similar transaction involving the Company or any of its subsidiaries, (ii) any restructuring, recapitalization, liquidation orsimilar transaction involving the Company or any of its subsidiaries, (iii) any acquisition of any of the Company's loans, debt securities,equity securities or assets, or rights or options to acquire interests in any of the Company's loans, debt securities, equity securities orassets, (iv) any proposal to seek representation on the Board (except as set forth in Article II hereof) or otherwise seek to control orinfluence the management, Board or policies of any of the Company, (v) any request or proposal to waive, terminate or amend theprovisions of this Agreement or (vi) any proposal, arrangement or other statement that is inconsistent with the terms of this Agreement,including this Section 5.1(a);(b) instigate, encourage or assist any third party (including forming a "group" with any such third party) to do, or enter intoany discussions or agreements with any third party with respect to, any of the actions set forth in clause (a) above;(c) take any action which would reasonably be expected to require the Company or any of its affiliates to make a publicannouncement regarding any of the actions set forth in clause (a) above;(d) except as provided in this Agreement, the SAR Agreement or the Note, acquire (or propose or agree to acquire), of recordor beneficially, by purchase or otherwise, any equity securities of the Company or any of its subsidiaries, or rights or options to acquireinterests in any of the Company's equity securities, except that subject to applicable securities laws limitations (including Companyimposed blackout periods), Investor may acquire up to an additional two million (2,000,000) shares of Capital Stock (subject toappropriate adjustments to reflect any Reorganization Event) at any time after the date of this Agreement (in addition to any shares ofCommon Stock issuable upon exercise of the SARs); or(e) engage in put, call, short sale, hedge, swap, straddle, collar or similar transactions with respect to any of the Securities(including any shares of Common Stock issuable upon exercise of the SARs), except with respect to any pledge or assignment of asecurity interest in the Securities to secure loans or other credit extended to the Investor by a Permitted Transferee.Notwithstanding the foregoing, (i) nothing in this Agreement shall restrict any Director from taking action in such capacity, and (ii) if(1) a Person “commences” (within the meaning of Rule12BUS_RE/5483002.414d-2 under the Securities Exchange Act of 1934, as amended) a tender or exchange offer for at least 50% of the outstanding capitalstock of the Company and the Board does not publicly recommend against such offer within ten business days of such commencementor (2) a Person enters into a definitive written agreement with the Company or any of its subsidiaries contemplating the acquisition (byway of merger, tender offer, or otherwise) of at least 50% of the outstanding capital stock of the Company or any of its subsidiaries,then, in any of such cases, the restrictions set forth in this Section 5.1 shall immediately terminate and cease to be of any further forceor effect with respect to the Investor or any of its Representatives.ARTICLE VI ADJUSTMENTSSection 6.1 Adjustments to Exercise Price for Cash Dividend. In case the Company shall pay or make a dividend or otherdistribution to holders of record of any shares of Common Stock in cash, the Exercise Price shall be reduced by amount of cash paidper share of Common Stock to such holders, such reduction to become effective when such dividend or other distribution is declaredby the Board.Section 6.2 Agreement for Reorganization Event. In the event of a stock dividend or stock distribution, stock split,subdivision, reclassification or reclassification or other change in corporate structure or capitalization affecting any of the Capital Stock(a “Reorganization Event”), the Exercise Price, the number of outstanding SARs pursuant to the SAR Agreement, the number ofSARs payable pursuant to a SARs Payment Option (as defined and pursuant to the Note) and the number and/or kind of shares orother property to be issued hereunder shall be appropriately adjusted to preserve the economic benefits of the SARs to the Investor (assuch economic benefits existed immediately prior to the announcement of such event) in a manner reasonably and in good faithdetermined by the Board.Section 6.3 Adjustments to SARs for Merger or Consolidation. If the Company shall be the surviving corporation in anymerger or consolidation (other than a merger or consolidation in which the Company survives but its outstanding shares are convertedinto securities of another corporation or exchanged for other consideration), the SAR Agreement shall pertain and apply to thesecurities which a holder of the number of shares of Common Stock then subject to the SAR Agreement should have been entitled toreceive. Notwithstanding the provisions of Section 11 of the SAR Agreement, any dissolution or liquidation of the Company, a sale ofall or substantially all of the assets of the Company or a merger or consolidation in which the Company is not the surviving corporationor becomes a subsidiary of another Person (in each case, other than in connection with a reincorporation of the Company into anotherjurisdiction, in which case the SAR Agreement shall pertain and apply to the securities which a holder of the number of shares ofCommon Stock then subject to the SAR Agreement should have been entitled to receive) or its outstanding shares are so converted orexchanged shall cause every SAR under the SAR Agreement to terminate and the Company shall pay to the Investor in cash theAppreciation Value or Adjusted Appreciation Value, as applicable, pursuant to the terms of the SAR Agreement.13BUS_RE/5483002.4ARTICLE VII TERM AND TERMINATIONSection 7.1 Termination. This Agreement will terminate upon the earliest of:(a) such time as there are no Securities that remain issued and outstanding;(b) the termination of the Purchase Agreement in accordance with its terms; or(c) the written agreement to terminate this Agreement between the Company and the Investor.Section 7.2 Effect of Termination. The termination of this Agreement will terminate all further rights and obligations of theInvestor and the Company under this Agreement except that such termination will not affect:(a) the obligation of a party to pay any amounts arising on or prior to the date of termination, or as a result of or in connectionwith such termination; or(b) the rights contained herein which by their terms are intended to survive termination of this Agreement, including thisSection 7.2 and Section 8.1, Section 8.3, Section 8.4, Section 8.5, Section 8.11 and Section 8.12.ARTICLE VIII MISCELLANEOUSSection 8.1 Confidentiality.(a) The Investor will, and will cause its Representatives to, keep confidential and not divulge any information (including allbudgets, business plans and analyses) concerning the Company, including its assets, business, operations, financial condition orprospects (“Information”), and to use, and cause its Representatives to use, such Information only in connection with its investment inthe Company; provided, that nothing herein will prevent the Investor from disclosing such Information (i) upon the order of any courtor administrative agency, (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over the Investor,(iii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories or other discovery requests,(iv) to the extent necessary in connection with the exercise of any remedy hereunder, (v) to Investor Representatives that in thereasonable judgment of the Investor need to know such Information or (vi) to any potential Third Party Purchaser in connection with aproposed Transfer of the Securities from the Investor as long as such transferee agrees to be bound by the provisions of this Section8.1, provided, further, that in the case of clause (i), (ii) or (iii), the Investor will notify the Company of the proposed disclosure as far inadvance of such disclosure as practicable and use reasonable efforts to ensure that any Information so disclosed is accordedconfidential treatment, when and if available.14BUS_RE/5483002.4(b) The restrictions of this Section 8.1 will not apply to information that (i) is or becomes generally available to the publicother than as a result of a disclosure by the Investor or any of its Representatives in violation of this Agreement, (ii) is or has beenindependently developed or conceived by the Investor without use of the Company’s Information, or (iii) is or becomes available to theInvestor or any of its Representatives on a non-confidential basis from a source other than the Company or any of its Representatives,provided, that such source is not known by the Investor to be bound by a confidentiality agreement with the Company or any of itsRepresentatives.Section 8.2 Expenses. Company shall reimburse Investor for (a) all fees and disbursements of counsel incurred in connectionwith this Agreement, the SAR Agreement and the Note, provided that such fees and disbursements shall in no event exceed theamount of fees and disbursements of counsel incurred by the Company in connection with this Agreement, the SAR Agreement andthe Note, and (b) reasonable out-of-pocket travel expenses incurred in connection with the Purchase Agreement, this Agreement, theSAR Agreement, the Note and the transactions contemplated hereby and thereby. All other costs and expenses, including fees anddisbursements of financial advisors and accountants, incurred in connection with this Agreement, the SAR Agreement and the Notewill be paid by the party incurring such costs and expenses.Section 8.3 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder or underthe Note or the SAR Agreement will be in writing and will be deemed to have been given (a) when delivered by hand (with writtenconfirmation of receipt), (b) one Business Day after the date delivered to a nationally recognized overnight courier for next BusinessDay delivery, (c) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, or (d)upon transmission if sent via facsimile (with confirmation of receipt) on a Business Day or the next Business Day if the day it is sent isnot a Business Day. Such communications must be sent to the respective parties at the following addresses (or at such other address fora party as will be specified in a notice given in accordance with this Section 8.3):If to the Company: General Communication, Inc.2550 Denali Street, Suite 1000Anchorage, Alaska 99503Attention: General CounselFacsimile: (907) 868-5676with a copy to: Sherman & Howard L.L.C.633 17th Street, Suite 3000Denver, CO 80202Attention: Steven Miller, Esq. Facsimile: (303) 298-0940If to the Investor: Searchlight ALX, L.P.c/o Searchlight Capital Partners, L.P.745 Fifth Avenue - 27th Floor15BUS_RE/5483002.4New York, NY 10151Attention: Eric ZinterhoferAndrew FreyFacsimile: (202) 207-3837 with a copy to: Wachtell, Lipton, Rosen & Katz51 West 52nd StreetNew York, NY 10019Attention: Steven A. CohenRonald C. Chen Fax: (212) 403-2000Section 8.4 Effectiveness. In no event will any draft of this Agreement create any obligation or liability, it being understoodthat this Agreement will be effective and binding only when a counterpart hereof has been executed and delivered by each partyhereto.Section 8.5 Interpretation. This Agreement will be construed without regard to any presumption or rule requiringconstruction or interpretation against the party drafting an instrument or causing any instrument to be drafted.Section 8.6 Headings. The headings in this Agreement are for reference only and will not affect the interpretation of thisAgreement.Section 8.7 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction,such invalidity, illegality or unenforceability will not affect any other term or provision of this Agreement or invalidate or renderunenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid,illegal or unenforceable, the parties hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of theparties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated asoriginally contemplated to the greatest extent possible.Section 8.8 Agreement. This Agreement, the Note and the SAR Agreement constitute the sole and entire agreement of theparties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneousunderstandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency or conflictbetween this Agreement and the Note or the SAR Agreement, the Investor and the Company shall, to the extent permitted byApplicable Law, amend this Agreement to comply with the terms of the Note or the SAR Agreement.Section 8.9 No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respectivesuccessors and permitted assigns and nothing herein, express or implied, is intended to or will confer upon any other Person or entityany legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.16BUS_RE/5483002.4Section 8.10 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented byan agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof will be effective unlessexplicitly set forth in writing and signed by the party so waiving. No waiver by any party will operate or be construed as a waiver inrespect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, andwhether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilegearising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right,remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, poweror privilege.Section 8.11 Governing Law; Submission to Jurisdiction; Service of Process; Waiver of Jury Trial.(a) This Agreement, the Note and the SAR Agreement will be governed, construed, and enforced in accordance with the lawsof the State of Delaware, without regard to conflicts of law principles thereunder.(b) The parties hereby irrevocably submit in any proceeding arising out of or relating to this Agreement, the Note and theSAR Agreement, or any of the transactions contemplated hereby or thereby, to the exclusive jurisdiction of the United States DistrictCourt for the District of Alaska or if jurisdiction is not available therein the jurisdiction of any court of the State of Alaska, and waiveany and all objections to such jurisdiction or venue that they may have under the laws of any state or country, including any argumentthat jurisdiction, sites or venue are inconvenient or otherwise improper(c) Each party agrees that process may be served upon such party in any manner authorized under the laws of the UnitedStates or Alaska, and waives any objections that such party may otherwise have to such process, provided, however, that process willbe served to the address set forth in Section 8.3.(d) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDERTHIS AGREEMENT, THE NOTE OR THE SAR AGREEMENT ARE LIKELY TO INVOLVE COMPLICATED ANDDIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVESANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF ORRELATING TO THIS AGREEMENT, THE NOTE OR THE SAR AGREEMENT OR THE TRANSACTIONSCONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT, THE NOTE OR THE SARAGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE OF ANY OTHER PARTY HASREPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THEFOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (ii) SUCH PARTY HAS CONSIDERED THEIMPLICATIONS OF THIS WAIVER, (iii) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) SUCHPARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUALWAIVERS AND CERTIFICATIONS IN THIS SECTION 8.11(d).17BUS_RE/5483002.4Section 8.12 Specific Performance. The parties agree that irreparable damage would occur if any provision of thisAgreement were not performed in accordance with the terms hereof and that the parties will be entitled to specific performance of theterms hereof, in addition to any other remedy to which they are entitled at law or in equity.Section 8.13 Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, butall of which together will be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission will be deemed to have the same legal effect as delivery of an original signed copy ofthis Agreement.[Signature Page Follows]IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first abovewritten.General Communication, Inc.By: /s/ Peter PoundsName: Peter PoundsTitle: SVP and CFOSearchlight ALX, L.P.By: Searchlight ALX GP, LLC, its general partnerBy: /s/ Eric ZinterhoferName: Eric ZinterhoferTitle: Authorized Person18BUS_RE/5483002.4Exhibit A – Form of NoteBUS_RE/5483002.4Exhibit B – Form of SAR AgreementBUS_RE/5483002.4Exhibit 4.3EXECUTION COPYTHIS PROMISSORY NOTE IS SUBJECT TO ALL OF THE TERMS AND CONDITIONS OF THE SECURITYHOLDERAGREEMENT, DATED AS OF DECEMBER 4, 2014, BY AND BETWEEN GENERAL COMMUNICATION, INC. ANDSEARCHLIGHT ALX, L.P., AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPALEXECUTIVE OFFICE OF THE MAKER. ANY ATTEMPTED TRANSFER IN VIOLATION OF THE TERMS OF SUCHAGREEMENT IS VOID.THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. IT MAY NOT BE OFFERED, SOLD OROTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVEREGISTRATION STATEMENT AS TO THE NOTE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATESECURITIES LAWS OR PURSUANT TO EXEMPTIONS FROM THE SECURITIES ACT AND APPLICABLE STATESECURITIES LAWS.UNSECURED PROMISSORY NOTE DUE 2023$75,000,000Anchorage, Alaska February 2, 2015GENERAL COMMUNICATION, INC. (“Maker”), an Alaska corporation, for value received, hereby promises to pay toSEARCHLIGHT ALX, L.P., a Delaware limited partnership (“Payee”), in lawful money of the United States of America, theprincipal amount of SEVENTY FIVE MILLION DOLLARS ($75,000,000) plus interest as set forth below from the date of thisUnsecured Promissory Note Due 2023 (the “Note”) on the unpaid balance. All principal and interest is to be paid without setoff orcounterclaim as set forth below. This Note is subject to the terms and conditions, of that certain Securityholder Agreement dated as ofDecember 4, 2014 by and between the Maker and Payee (the “Securityholder Agreement”), which was executed in connection withthe execution of this Note, and that certain Stock Appreciation Rights Agreement dated as of the date hereof by and between theMaker and Payee (the “SAR Agreement”) pursuant to which Maker issued certain SARs (as defined in the SAR Agreement) toPayee. Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Securityholder Agreement.Maker further agrees as follows:Section 1. Interest Rate.(a) Except as provided in Section 1(d), this Note will bear interest at a per annum rate equal to SEVEN AND ONE-HALFPERCENT (7.5%) from the date hereof until this Note isW/2422684BUS_RE/5530267.1paid in full. Interest shall be payable annually in arrears on each anniversary of the date of this Note (or, if such anniversary is not aBusiness Day, on the next succeeding Business Day), at maturity and at the time of any payment or prepayment of principal. Allinterest payments shall be made in cash, or at the discretion of Maker, by making the interest payable in kind by capitalizing suchinterest due and adding it to the outstanding principal amount of this Note, in which case the Maker shall also issue to Payee FOURHUNDRETHS (.04) of a SAR for each ONE DOLLAR ($1.00) of such interest being capitalized (as such conversion ratio may beadjusted from time to time pursuant to Article VI of the Securityholder Agreement) (the “PIK Payment Option”). Maker shallexercise the PIK Payment Option by providing written notice to the Payee, at which time the number of SARs subject to the SARAgreement shall be appropriately adjusted in accordance with Section 3 of the SAR Agreement.(b) References to the “principal amount of the Note” shall include any increase in the principal amount of the Note as a resultof the exercise of the PIK Payment Option.(c) Interest shall be computed on the basis of a year of 365/366 days for the actual number of days elapsed.(d) After an Event of Default (as defined below) has occurred or maturity (whether by acceleration or otherwise, and before aswell as after judgment), all unpaid principal, accrued interest and any other amounts payable by Maker under this Note shall bearinterest until paid at TWO PERCENT (2%) in excess of the interest rate otherwise applicable to the unpaid balance under this Note.Section 2. Payments.(a)All outstanding amounts owing under this Note, including unpaid interest and principal, shall be due and payable incash on February 2, 2023.(b)Prior to February 2, 2019, Maker may not prepay this Note. At any time on or after February 2, 2019, Maker shallhave the right to prepay this Note in full or in part, together with all accrued and unpaid interest on the principal amount of this Notebeing prepaid, without premium or penalty three business days after giving written notice to Payee of Maker’s intention to prepay thisNote.(c)All cash payments received for application to this Note, whether designated as principal or interest, shall be firstapplied to the payment of accrued interest and the balance applied in reduction of the principal amount hereof.(d)Payments under this Note shall be made in the lawful money of the United States of America to the Payee by wiretransfer to such account or accounts as the Payee may direct by written notice to the Maker.Section 3. Default. It shall be an event of default (“Event of Default”) upon the occurrence of any of the following events:2BUS_RE/5530267.1(a)any failure on the part of Maker to make any principal payment under this Note when due, whether by acceleration orotherwise;(b)any failure on the part of Maker to make any interest payment under this Note when due, whether by acceleration orotherwise, and the continuation of such failure for 30 days;(c)any failure on the part of Maker to keep or perform any of the terms or provisions (other than payment) of this Note andthe continuation of such failure for 30 days after notice of such failure by Payee to Maker;(d)Maker becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due,or Maker commences any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt,moratorium or similar law or statute;(e)a proceeding shall be commenced against Maker under any bankruptcy, reorganization, arrangement, readjustment ofdebt, moratorium or similar law or statute, and relief is ordered against it, or the proceeding is controverted but is notdismissed within 60 days after commencement thereof;(f)Maker consents to or suffers the appointment of a receiver, trustee or custodian to any substantial part of its assets that isnot vacated within 30 days; or(g)any representation or warranty made by the Maker herein or in the Securityholder Agreement shall prove to have beenfalse or misleading in any material respect when so made.Upon the occurrence of and during the continuation of an Event of Default (i) if such event is an Event of Default specified inclause (d) or (e) above, the entire unpaid principal of this Note, interest accrued thereon and all other amounts owing by Makerhereunder, shall become immediately due and payable, and (ii) if such event is any other Event of Default, Payee may, by notice toMaker, declare the unpaid principal amount of this Note, interest accrued thereon and all other amounts owing by Maker hereunder tobe immediately due and payable.Section 4. Waivers.(a)Maker waives demand, presentment, protest, notice of protest, notice of dishonor and all other notices or demands ofany kind or nature with respect to this Note.(b)Maker agrees that a waiver of rights under this Note shall not be deemed to be made by Payee unless such waivershall be in writing, duly signed by Payee, and each such waiver, if any, shall apply only with respect to the specific instance involvedand shall in no way impair the rights of Payee or the obligations of Maker in any other respect at any other time.(c)Maker agrees that in the event Payee demands or accepts partial payment of this Note, such demand or acceptanceshall not be deemed to constitute a waiver of any right to3BUS_RE/5530267.1demand the entire unpaid balance of this Note at any time in accordance with the terms of this Note.Section 5. Collection Costs. Maker will upon demand pay to Payee the amount of any and all reasonable costs and expensesincluding, without limitation, the reasonable fees and disbursements of its counsel (whether or not suit is instituted) and of any expertsand agents, which Payee may incur in connection with the enforcement of this Note during an Event of Default.Section 6. Assignment of Note. Maker will not be permitted to assign or transfer this Note or any of its obligations under thisNote without the consent of the Payee. Payee may not assign or transfer this Note or any of its rights under this Note in any mannerwhatsoever except as set forth in Article III of the Securityholder Agreement.Section 7. Miscellaneous.(a)This Note may be modified only by written agreement signed by Maker and Payee. This Note may not be modifiedby an oral agreement, even if supported by new consideration.(b)The governing law for this Agreement and certain related provisions are set forth in Section 8.11 of theSecurityholder Agreement.(c)Subject to Section 6, the covenants, terms and conditions contained in this Note apply to and bind the successors andpermitted assigns of the parties.(d)This Note, together with the Securityholder Agreement and the SAR Agreement constitute a final written expressionof all the terms of the agreement between the parties regarding the subject matter hereof, is a complete and exclusive statement ofthose terms, and supersedes all prior and contemporaneous agreements, understandings and representations between the parties. If anyprovision or any word, term, clause or other part of any provision of this Note shall be invalid for any reason, the same shall beineffective, but the remainder of this Note shall not be affected and shall remain in full force and effect.(e)All notices, consents or other communications provided for in this Note or otherwise required by law shall be inwriting and shall be given as provided in Section 8.3 of the Securityholder Agreement. Such addresses may be changed by noticegiven as provided in such section.(f)Maker hereby agrees to treat, for United States federal income tax purposes, the possibility that Maker will exercisethe PIK Payment Option as a contingency that is “remote” or “incidental” within the meaning of Treasury Regulation Section 1.1275-2(h), and Maker shall not to take any position on any tax return or otherwise for income tax purposes inconsistent with such treatment.[Signature Page Follows]4BUS_RE/5530267.1IN WITNESS WHEREOF, Maker has executed this Note effective as of the date first set forth above.General Communication, Inc.By: /s/ Thomas C. ChestermanName: Thomas C. ChestermanTitle: Vice President, Finance[Unsecured Promissory Note Due 2023 – Signature Page]Exhibit 4.4EXECUTION COPY THIS STOCK APPRECIATION RIGHTS AGREEMENT IS SUBJECT TO ALL OF THE TERMS AND CONDITIONS OFTHE SECURITYHOLDER AGREEMENT, DATED AS OF DECEMBER 4, 2014, BY AND BETWEEN GENERALCOMMUNICATION, INC. AND SEARCHLIGHT ALX, L.P., AS AMENDED FROM TIME TO TIME, A COPY OF WHICHIS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY. ANY ATTEMPTED TRANSFER INVIOLATION OF THE TERMS OF SUCH AGREEMENT IS VOID.THE SARS (AS DEFINED BELOW) REPRESENTED BY THIS STOCK APPRECIATION RIGHTS AGREEMENT HAVENOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ORANY APPLICABLE STATE SECURITIES LAWS. SUCH SARS MAY NOT BE OFFERED, SOLD OR OTHERWISETRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATIONSTATEMENT AS TO THE SARS UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWSOR PURSUANT TO EXEMPTIONS FROM THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.STOCK APPRECIATION RIGHTS AGREEMENTThis Stock Appreciation Rights Agreement (this “Agreement”) is made and entered into as of February 2, 2015 by and betweenGeneral Communication, Inc., an Alaska corporation (the “Company”) and Searchlight ALX, L.P., a Delaware limited partnership(“Searchlight”).Grant Date: February 2, 2015 Number of SARs: 3,000,000 (as adjusted pursuant to Section 3 below) Exercise Price per SAR: $13.00 Expiration Date: Eight years from Grant Date Section 1.Grant of SARs.Section 1.1 Grant. The Company hereby grants to Searchlight an aggregate of 3,000,000 stock appreciation rights (asadjusted pursuant to Section 3 below, the “SARs”).W/2423378BUS_RE/5530268.1Each SAR entitles Searchlight to receive, upon exercise, an amount payable, at the election of the Company in either shares of Class Acommon stock of the Company (the “Common Stock”) or cash equal in value to the excess of (a) the Fair Market Value of a share ofCommon Stock on the date of exercise, over (b) the Exercise Price (the “Appreciation Value”). For this purpose, “Fair MarketValue” means, as of any particular exercise date, the volume weighted average of the Common Stock on the primary stock exchangeon which the Common Stock may at the time be listed for the 10 trading day period ending on the day immediately preceding suchexercise date.Section 1.2 Promissory Note; Securityholder Agreement. Simultaneously with the execution of this Agreement,Searchlight is purchasing an Unsecured Promissory Note due 2023 issued by the Company dated as of the date hereof in the principalamount of $75,000,000 (the “Promissory Note”); and prior to the execution of this Agreement, Searchlight and the Company haveentered into that certain Securityholder Agreement dated as of December 4, 2014 (the “Securityholder Agreement”) which providescertain rights to Searchlight and provides for certain restrictions on the transfer of the SARs. Capitalized terms used but not definedherein will have the meaning ascribed to them in the Securityholder Agreement.Section 2. Exercise. Each SAR will become exercisable on the fourth anniversary of the Grant Date (the “Exercise Date”), subject tothe call right of the Company as set forth in Section 6.2.Section 2.1 Expiration. The SARs will expire on the Expiration Date set forth above, or earlier as provided in thisAgreement.Section 3. Adjustment to Number of SARs and Exercise Price. Pursuant to the terms and conditions set forth in Section 1(a) of thePromissory Note, the Company has the option to pay accrued interest payments under the Promissory Note with the PIK PaymentOption (as defined in the Promissory Note). To the extent that the Company exercises the PIK Payment Option in accordance with theterms and conditions of the Promissory Note or an Adjustment Event (as defined below) occurs, then the number of SARs representedby this Agreement from time to time shall be evidenced by notations by the Company on the attached Schedule 1. Such amendedSchedule 1 shall promptly thereafter be provided to Searchlight and the number of SARs reflected on such amended Schedule 1 shallbe the number of SARs represented by this Agreement. In addition, the number of SARs represented by this Agreement and theExercise Price of the SARs hereunder shall be subject to adjustment as2BUS_RE/5530268.1provided in Article VI of the Securityholder Agreement, which provisions are expressly incorporated by reference herein (any suchadjustment described therein, an “Adjustment Event”).Section 4. Manner of Exercise.Section 4.1 When to Exercise. Except as otherwise provided in this Agreement, Searchlight may exercise its SARs, inwhole or in part, at any time after the Exercise Date and until the Expiration Date by following the procedures set forth in this Section4. If partially exercised, Searchlight may exercise the remaining unexercised portion of the SARs at any time after the Exercise Dateand until the Expiration Date. No SARs shall be exercisable after the Expiration Date.Section 4.2 Election to Exercise. To exercise the SARs, Searchlight must deliver to the Company a written notice inaccordance with Section 8.3 of the Securityholder Agreement to the Company which sets forth the number of SARs being exercised,together with any additional documents as the Company may reasonably require (the “Exercise Notice”). Each such Exercise Noticemust satisfy whatever then current procedures set forth in this Agreement apply to the SARs and must contain such representations asthe Company reasonably requires.Section 4.3 Documentation of Right to Exercise. If someone other than Searchlight exercises the SARs, then suchperson must submit documentation reasonably acceptable to the Company verifying that the transfer to such person was made incompliance with the terms and conditions of the Securityholder Agreement and that such person has the legal right to exercise theSARs.Section 4.4 Date of Exercise. The SARs shall be deemed to be exercised on the business day that the Companyreceives a fully executed Exercise Notice. If the notice is received after business hours on such date, then the SARs shall be deemed tobe exercised on the business day immediately following the business day such Exercise Notice is received by the Company.Section 5. [Reserved]Section 6. Settlement of SARs; Early Cash-Out Option.Section 6.1 Upon the exercise of all or a portion of the SARs, Searchlight shall be entitled to shares of Common Stockequal to the Appreciation Value of the SARs3BUS_RE/5530268.1being exercised; provided, that if Searchlight shall have exercised its SARs, then for a period of seven days following the delivery ofan Exercise Notice, the Company may, in its discretion deliver a notice to Searchlight pursuant to which it may elect to immediatelycancel the SARs that have been exercised and make a cash payment to Searchlight within 45 days thereafter equal to the AppreciationValue of such exercised SARs; provided that if the Company does not deliver such notice, the Company shall deliver such shares ofCommon Stock to Searchlight within five days following the end of such seven day period. Fractional shares will not be delivered andthe number of shares of Common Stock to be delivered on exercise shall be rounded down to the nearest whole share.Section 6.2 At any time on or after the date that all outstanding amounts (included all accrued interest) under thePromissory Note have been repaid, the Company may, in its discretion deliver a notice to Searchlight (the “Early Cash-Out Notice”)pursuant to which it may elect to immediately cancel all outstanding SARs in exchange for a cash payment to Searchlight within 45days thereafter equal to the Adjusted Appreciation Value of such cancelled SARs. For purposes of this Agreement, “AdjustedAppreciation Value” shall mean the greater of: (a) the Appreciation Value; or (b) an amount equal to the excess of (i) the GuaranteedMinimum Value (as defined below) of a share of Common Stock on the date of the Early Cash-Out Notice or the date of the Changeof Control Notice (as defined below) (as applicable), over (ii) the Exercise Price. “Guaranteed Minimum Value” shall be an amountdetermined pursuant to the following table (which amounts shall be adjusted in the same manner and at the same time as the ExercisePrice is adjusted pursuant to the terms of Article VI of the Securityholder Agreement):Date of Early Cash-Out Notice or Date ofChange of Control NoticeGuaranteed Minimum ValueDate of this Agreement$13.00On the first anniversary of the date of thisAgreement$14.56On the second anniversary of the date of thisAgreement$16.34On the third anniversary of the date of thisAgreement$18.36On the fourth anniversary of the date of thisAgreement$20.664BUS_RE/5530268.1On the fifth anniversary of the date of thisAgreement$23.28On the sixth anniversary of the date of thisAgreement$26.25On the seventh anniversary of the date of thisAgreement$29.64On the eighth anniversary of the date of thisAgreement$33.49On a date that is in between the date of thisAgreement and the eighth anniversary of thisAgreement (not including the date that is thefirst, second, third, fourth, fifth, sixth, seventhor eighth anniversary of the date of thisAgreement)An amount equal to: A + ((B – A) * (C/365))Where:A = the Guaranteed Minimum Value of the first anniversary immediatelypreceding the date of the Early Cash-Out Notice or the Change of ControlNotice (either such notice, the “Notice”)B = the Guaranteed Minimum Value of the first anniversary immediatelyfollowing the date of the NoticeC = the number of days between the first anniversary immediately precedingthe date of the NoticeSection 7. [Reserved]Section 8. No Right to Continued Service on the Board. Nothing in this Agreement shall confer upon Searchlight any right tocontinue to appoint a member of the Board of Directors of the Company. Such right shall be governed exclusively by the terms andconditions of the Securityholder Agreement.Section 9. No Rights as Shareholder. Searchlight shall not have any rights as a shareholder with respect to any of the shares ofCommon Stock covered by the SARs prior to the date that it exercises the SARs and becomes the holder of record. Other thanpursuant to the terms of this Agreement or the Securityholder Agreement, no adjustment shall be made for dividends or other rights forwhich the record date is prior to the date of issuance.5BUS_RE/5530268.1Section 10. Transferability. The SARs are not transferable by Searchlight other than as expressly permitted by the terms andconditions of Article III of the Securityholder Agreement. To the extent the SARs are transferred in accordance with the SecurityholderAgreement, references to Searchlight herein shall be deemed to refer to such transferee.Section 11. Change of Control.Section 11.1 Effect on SARs. For purposes of this Section 11, the phrase “Change of Control” shall have the samemeaning as set forth in the Amended and Restated 1986 Stock Option Plan of the Company (restated effective September 26, 2014),and shall also include (i) any merger or other similar transaction in which the Company does not survive or becomes a subsidiary ofanother Person (other than in connection with a reincorporation of the Company into another jurisdiction), (ii) a liquidation ordissolution of the Company and (iii) a transaction or series of related transactions as a result of or in connection with which theCommon Stock becomes eligible for delisting on a national securities exchange; provided, however that a Change of Control shall notbe deemed to include an Affiliate who acquires 50% or more but less than 75% of the combined voting power of the then outstandingsecurities of the Company having the right to vote in the election of directors.Section 11.2 Change of Control Cash-Out. Notwithstanding anything herein to the contrary, in the event of a Changeof Control (which the Company shall give Searchlight ten days written notice (“Change of Control Notice”) prior to consummationthereof) (a) on or prior to the four-year anniversary of the date of this Agreement, the Company shall pay to Searchlight the AdjustedAppreciation Value of the SARs in cash, and (b) after the four-year anniversary of the date of this Agreement, the Company shall payto Searchlight (i) the Appreciation Value of the SARs in cash based upon the price per share of Common Stock received or to bereceived by other shareholders of the Company or if no such consideration is to be received based on the Appreciation Value ascalculated elsewhere in this Agreement, if such Change of Control is not an Affiliate Transaction, or (ii) the Adjusted AppreciationValue of the SARs in cash, if such Change of Control is an Affiliate Transaction. Notwithstanding the foregoing, if at the time of aChange of Control that is not an Affiliate Transaction, the Exercise Price of the SAR equals or exceeds the price paid for a share ofCommon Stock in connection with such Change of Control, the Company may cancel the SARs without the payment of considerationtherefor. For purposes of this Agreement, “Affiliate Transaction” shall mean a Change of Control involving or with an Affiliate (asdefined in the Securityholder Agreement) of the Company.6BUS_RE/5530268.1Section 12. Compliance with Law. The exercise of the SARs shall be subject to compliance by the Company and Searchlight with allapplicable laws, including the requirements of any stock exchange on which the Company's shares of Common Stock may be listed.Searchlight may not exercise the SARs if such exercise would violate any applicable Federal or state securities laws or other laws orregulations. Other than with respect to its obligations under the Securityholders Agreement and any registration rights agreemententered into by the Company with Searchlight, Searchlight understands that the Company is under no obligation to register the sharesof Common Stock with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect suchcompliance.Section 13. Notices. Any notice required to be delivered to the parties under this Agreement shall be made in accordance withSection 8.3 of the Securityholder Agreement.Section 14. Governing Law. The governing law for this Agreement and certain related provisions are set forth in Section 8.11 of theSecurityholder Agreement.Section 15. Binding Effect; No Third Party Beneficiaries. This Agreement will be binding upon and inure to the benefit of the partiesand their respective permitted successors, transferees and assigns. Except as provided in Section 10 of this Agreement, nothing in thisAgreement, expressed or implied, is intended to confer upon any person or entity, other than the parties or their respective permittedsuccessors, transferees and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.Section 16. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity orenforceability of any other provision of this Agreement, and each provision of this Agreement shall be severable and enforceable to theextent permitted by law.Section 17. Amendment. This Agreement may be amended or modified only by an instrument in writing signed by each party.Section 18. Nonalienation of Benefits. Except as provided in Section 10 of this Agreement, (i) no right or benefit under thisAgreement shall be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance orcharge, and any attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void,and (ii) no right or benefit hereunder shall in any7BUS_RE/5530268.1manner be liable for or subject to the debts, contracts, liabilities or torts of Searchlight or other person entitled to such benefits.Section 19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all ofwhich together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimiletransmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the originalgraphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing anoriginal signature.Section 20. Acceptance. Searchlight hereby acknowledges receipt of a copy of this Agreement. Searchlight has read and understandsthe terms and provisions thereof, and accepts the SARs subject to all of the terms and conditions of this Agreement and theSecurityholder Agreement. Searchlight acknowledges that there may be adverse tax consequences upon exercise of the SARs and thatSearchlight should consult a tax advisor prior to such exercise.Section 21. Nature of SAR Interest. The SAR will be entirely unfunded, and nothing contained in, and no action taken pursuant to,this Agreement will create or be construed to create a trust or funded benefit of any kind in favor of any Person, or a fiduciaryrelationship between or among the Company, the Company Board of Directors, Searchlight or any other Person. Title to and beneficialownership of all assets, if any, whether cash or investments, that the Company may designate to pay the SAR Appreciation Value willat all times remain in the Company’s general asset account, and neither Searchlight nor any other Person will have any right orproperty interest whatsoever in any such asset of the Company until such SAR Appreciation Value is required to be paid to Searchlightin accordance with this Agreement. The Company will not be required to pre-fund its obligations under this Agreement in any manner,whether by purchase of insurance contracts, contributions to a trust fund, deposits in an escrow account or otherwise. If the Companyin its discretion does purchase any such contract or deposit funds in any such fund or account, Searchlight will not have any right orinterest in or to such contract, trust or account, and Searchlight will have only the rights of a general unsecured creditor with respect tothe Company’s unsecured promise to pay the SAR Appreciation Value in accordance with this Agreement.[Signature Page Follows]8BUS_RE/5530268.1IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. General Communication, Inc. By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance Searchlight ALX, L.P.By: Searchlight ALX GP, LLC, its general partner By: /s/ Eric Zinterhofer Name: Eric Zinterhofer Title: Authorized Person[Stock Appreciation Rights Agreement – Signature Page]SCHEDULE 1ADJUSTMENTS TO NUMBER OF SARSFOLLOWING EACH EXERCISE OF PIK PAYMENT OPTION OR ADJUSTMENT EVENTNumber of SARsBefore Exercise of PIKPayment Option orAdjustment EventDate of Exercise of PIKPayment Option orApplicable AdjustmentEventNumber of SARs IssuedIn Connection WithExercise of PIKPayment Option OrAdjustment EventNumber of SARS AfterExercise of PIKPayment Option orAdjustment EventNotation Made By3,000,000 BUS_RE/5530268.1Exhibit 10.50****CONFIDENTIAL PORTION has been omitted pursuant to a request for confidential treatment by the Company to, and thematerial has been separately filed with, the SEC. Each omitted Confidential Portion is marked by four asterisks.TWENTIETH AMENDMENT TO THEFULL-TIME TRANSPONDER CAPACITY AGREEMENT (PRE-LAUNCH)This Twentieth Amendment to the Full-time Transponder Capacity Agreement (Pre-Launch) (the “Nineteenth Amendment”) is made and entered into as of this 11th day of August, 2014 (the “Effective Date”) by andbetween INTELSAT CORPORATION, a Delaware corporation (“Intelsat”), and GCI COMMUNICATIONS CORP., an Alaskancorporation (“Customer”).RECITALSWHEREAS, pursuant to that certain Full-Time Transponder Capacity Agreement(Pre-Launch) dated as of March 31, 2006, as amended (collectively, the “Agreement”) between Intelsat and Customer, Intelsat isproviding Customer with **** transponders on Galaxy 18 (the “**** Transponders”); **** transponders on Galaxy 18 (the “****Transponders”); and **** transponders on Horizons 1 (the “**** Transponder”);WHEREAS, Customer wishes **** Intelsat, all of which is further defined below;AGREEMENTNOW, THEREFORE, in consideration of the foregoing and of mutual covenantsand agreements hereinafter set forth, the sufficiency and receipt of which is hereby acknowledged, the parties agree as follows:1.Except as specifically provided herein, all terms and provisions of the Agreement shall remain in full force and effect.2.Section 1.1, Description of Capacity. This Section shall be deleted and replaced with the following:“Intelsat agrees to provide to Customer and Customer agrees to accept from Intelsat, on a **** day, **** week), in outerspace,for the Capacity Term (as defined here), the Customer’s Transponder Capacity (defined below) meeting the “PerformanceSpecifications” set forth in the “Technical Appendix” attached hereto as Appendix B. For purposes of this Agreement, the“Customer’s Transponder Capacity” or “Customer’s Transponders” shall **** (a) **** (as defined in Section 1.2, below)**** transponders (collectively, the “Customer’s **** Transponders’ and individually, the “Customer’s **** Transponder”)from that certain U.S. domestic satellite referred to by Intelsat as “****,” located **** Longitude, (b) **** transponders fromthe **** of that certain satellite referred to by Intelsat as “****” at **** Longitude (“Customer’s **** Transponder”); (c) ****Transponder **** on ****; (d) **** Transponder from that certain U.S. domestic satellite referred to by Intelsat as “****,”SPID: TBD OPT-045187OSC#10361****CONFIDENTIAL TREATMENTlocated **** Longitude (the “**** Transponder”); (e) **** Transponder **** on **** (the “**** Transponder ****”); (f)**** Transponder **** on **** (the “**** Transponder ****”).” 3.Section 3.1, Monthly Fee. Customer’s Monthly Fee shall be as set forth in Appendix A attached hereto.4.Except as specifically set forth in this Amendment, all terms and conditions of the Agreement remain in full force and effect.IN WITNESS WHEREOF, each of the Parties hereto has duly executed and delivered this Eighteenth Amendment as of the day andyear above written.INTELSAT CORPORATION GCI COMMUNICATION CORP. By:/s/ Stephen A. Chernow By:/s/ Jimmy Sipes Name:Stephen A. Chernow Name:Jimmy Sipes Title:VP & Deputy General Counsel Title:VP Network Services & Chief Engineer Date:August 13, 2014 Date:August 11, 2014 SPID: TBD OPT-045187OSC#10361****CONFIDENTIAL TREATMENTAPPENDIX ACUSTOMER’S TRANSPONDER CAPACITY AND PAYMENT SCHEUDLE FORGCI COMMUNICATIONS CORP.SVO #****/Transponder NoTransponder TypeCapacity TermMonthly Fee ************ – ****US$**** ** ************ – ****US$**** ** ************ – ****US$**** * ************ – ****US$**** ** ************ – ****US$**** ** ************ – ****US$**** ** ************ – ****US$**** * ************ – ****US$**** ** ************ – ****US$**** * ************ – ****US$**** * ************ – ****US$**** * ************ – ****US$**** ** ************ – ****US$**** * ************ – ****US$**** * ************ – ****US$**** * ************ – ****US$**** *** ************ – ****US$**** *** ************ – ****US$**** *** ************ – ****US$**** *** ************ – ****US$**** **** **** Fee includes US$**** for **** Fee and the US$**** for each of **** Transponders under Article 14. If the **** Longitude**** Transponder is **** or **** Customer is **** Transponder on **** (of its successor satellite), the **** Fee **** Transponder****. If, however, the **** Longitude **** Transponder ****, then the **** Fee for **** Transponder **** Fee. The ****Longitude **** fee shall be ****.** **** Fee includes US$**** for **** Fee and the US$**** for each of **** and **** Transponders with **** Replacement**** under Article 15. If the **** Replacement Transponder is **** or **** Customer **** Transponder on **** Replacement, the**** FeeSPID: TBD OPT-045187OSC#10361****CONFIDENTIAL TREATMENT**** Transponder ****. If, however, the **** Replacement Transponder ****, then the **** Fee for **** Transponder **** Fee.The *** Replacement **** Fee shall be ****.*** **** Fee includes US$**** for **** Fee and the US$**** for **** Customer’s **** Transponder Galaxy XR **** Fees(hereinafter referred to as the “**** Fee” as **** is the Replacement Satellite **** Galaxy XR), **** for transponder ****. If the**** Transponder **** (as defined in Article 17), the **** Fee **** Transponder ****. If, however, the **** Transponder **** (asdefined in Article 17), then the **** Fee **** Transponder **** Fee. The **** Fee shall be ****. SPID: TBD OPT-045187OSC#10361Exhibit 10.51EXECUTION COPYFOURTH AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENTdated as of February 2, 2015amongGCI HOLDINGS, INC.,as Borrower,GCI, INC.,as Parent,the Subsidiary Guarantors party heretothe Lenders party hereto,MUFG UNION BANK, N.A.,andSUNTRUST BANK,as Co-Syndication Agents,BANK OF AMERICA, N.A.,as Documentation Agent,andCREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,as Administrative Agent______________________SUNTRUST ROBINSON HUMPHREY, INC.,CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,andMERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,as Co-Lead Arrangers and Joint Book RunnersBryan Cave LLP1290 Avenue of the AmericasNew York, New York 101041821445.29\C072091\0303228TABLE OF CONTENTSPageARTICLE 1 DEFINITIONS 1Section 1.1. Defined Terms 1Section 1.2. Classification of Loans and Borrowings 36Section 1.3. Terms Generally 37Section 1.4. Accounting Terms; GAAP 37ARTICLE 2 THE CREDITS 38Section 2.1. Commitments and Loans 38Section 2.2. Loans and Borrowings 39Section 2.3. Requests for Borrowings 40Section 2.4. Funding of Borrowings 41Section 2.5. Termination, Reduction and Increase of Commitments 42Section 2.6. Repayment of Loans 44Section 2.7. Prepayment of Loans 44Section 2.8. Evidence of Debt 47Section 2.9. Letters of Credit 47Section 2.10. Swingline Loans 52Section 2.11. Payments Generally; Pro Rata Treatment; Sharing of Setoffs 53Section 2.12. Defaulting Lenders 55Section 2.13. Incremental Term Facilities 57Section 2.14. Refinancing Amendments. 59Section 2.15. Extensions of Term Loans and Revolving Commitments. 60ARTICLE 3 INTEREST, FEES, YIELD PROTECTION, ETC. 62Section 3.1. Interest 62Section 3.2. Interest Elections 63Section 3.3. Fees 65Section 3.4. Alternate Rate of Interest 66Section 3.5. Increased Costs; Illegality 66Section 3.6. Break Funding Payments 68Section 3.7. Taxes 69Section 3.8. Mitigation Obligations 71Section 3.9. Replacement of Lenders 71ARTICLE 4 REPRESENTATIONS AND WARRANTIES 72Section 4.1. Organization; Powers 72Section 4.2. Authorization; Enforceability 72Section 4.3. Governmental Approvals; No Conflicts 73Section 4.4. Financial Condition 73Section 4.5. Properties 74Section 4.6. Litigation and Environmental Matters 74Section 4.7. Compliance with Laws and Agreements 75Section 4.8. Franchises, FCC, State PUC and Certain Copyright Matters 75(i)1821445.29\C072091\0303228Section 4.9. Investment Company Status 76Section 4.10. Taxes 76Section 4.11. ERISA 77Section 4.12. Disclosure 77Section 4.13. Subsidiaries 77Section 4.14. Insurance 77Section 4.15. Labor Matters 78Section 4.16. Solvency 78Section 4.17. Federal Reserve Regulations 78Section 4.18. Use of Proceeds 78Section 4.19. Anti-Corruption Laws and Sanctions; Anti-Terrorism Laws 79ARTICLE 5 CONDITIONS 79Section 5.1. Initial Conditions. 79Section 5.2. Conditions to Future Credit Events 81ARTICLE 6 AFFIRMATIVE COVENANTS 82Section 6.1. Financial Statements and Other Information 82Section 6.2. Notices of Material Events 84Section 6.3. Existence; Conduct of Business 84Section 6.4. Payment and Performance of Obligations 85Section 6.5. Maintenance of Properties 85Section 6.6. Books and Records; Inspection Rights 85Section 6.7. Compliance with Laws 85Section 6.8. Environmental Compliance 85Section 6.9. Insurance 86Section 6.10. Casualty and Condemnation 86Section 6.11. Additional Subsidiaries 86Section 6.12. Information Regarding Collateral. 87Section 6.13. Further Assurances 87Section 6.14. Use of Proceeds 87Section 6.15. Maintenance of Ratings 88ARTICLE 7 NEGATIVE COVENANTS 88Section 7.1. Indebtedness 88Section 7.2. Liens 90Section 7.3. Fundamental Changes 91Section 7.4. Investments 93Section 7.5. Acquisitions 94Section 7.6. Sale and Lease-Back Transactions 95Section 7.7. Dispositions 96Section 7.8. Restricted Payments 97Section 7.9. Prepayments 98Section 7.10. Transactions with Affiliates 98Section 7.11. Restrictive Agreements 99Section 7.12. Hedging Agreements 99Section 7.13. Amendment of Material Documents 100(ii)1821445.29\C072091\0303228Section 7.14. Ownership of Subsidiaries 100Section 7.15. Sanctions; Anti-Corruption Laws 100Section 7.16. Interest Coverage Ratio 100Section 7.17. Total Leverage Ratio 100Section 7.18. Senior Leverage Ratio 100ARTICLE 8 EVENTS OF DEFAULT 101ARTICLE 9 THE ADMINISTRATIVE AGENT 104ARTICLE 10 MISCELLANEOUS 106Section 10.1. Notices 106Section 10.2. Waivers; Amendments 107Section 10.3. Expenses; Indemnity; Damage Waiver 110Section 10.4. Successors and Assigns 112Section 10.5. Survival 115Section 10.6. Counterparts; Integration; Effectiveness 115Section 10.7. Severability 116Section 10.8. Right of Setoff 116Section 10.9. Governing Law; Waiver of Jury Trial 116Section 10.10. Submission To Jurisdiction; Waivers 117Section 10.11. Headings 117Section 10.12. Interest Rate Limitation 117Section 10.13. Patriot Act 118Section 10.14. Confidentiality 118Section 10.15. Amendment and Restatement 119Section 10.16. No Fiduciary Duty 119Section 10.17. Savings Clause 120ARTICLE 11 GUARANTEE 120Section 11.1. Guarantee; Fraudulent Transfer, Etc.; Contribution 120Section 11.2. Obligations Not Waived 122Section 11.3. Security 122Section 11.4. No Discharge or Diminishment of Guarantee 122Section 11.5. Defenses of Borrower Waived 123Section 11.6. Agreement to Pay; Subordination 123Section 11.7. Information 123Section 11.8. Termination 124Section 11.9. Additional Guarantors 124Section 11.10. Keepwell 124(iii)1821445.29\C072091\0303228EXHIBITS:Exhibit A Form of Assignment and AcceptanceExhibit B-1 Form of Revolving Loan NoteExhibit B-2 Form of Existing Term Loan NoteExhibit B-3 Form of Swingline NoteExhibit B-4 Form of Term B Loan NoteExhibit C Form of Borrowing RequestExhibit D Form of Interest Election RequestExhibit E-1 Form of Opinion of Sherman & Howard L.L.C.Exhibit E-2 Form of Opinion of Stoel Rives LLPExhibit E-3 Form of Opinion of BorrowerExhibit F Form of Closing CertificateExhibit G Form of Compliance CertificateExhibit H Form of Solvency CertificateExhibit I Form of Guarantee SupplementExhibit J Form of Revolving Increase SupplementSCHEDULES:Schedule 1.1A CommitmentsSchedule 1.1B List of Existing Letters of CreditSchedule 4.6 Disclosed MattersSchedule 4.8 List of Matters Affecting AuthorizationsSchedule 4.13 List of SubsidiariesSchedule 4.14 List of InsuranceSchedule 7.1 List of Existing IndebtednessSchedule 7.2 List of Existing LiensSchedule 7.4 List of Existing InvestmentsSchedule 7.10 List of Agreements with AffiliatesSchedule 7.11 List of Existing Restrictions(iv)1821445.29\C072091\0303228 FOURTH AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT, dated as of February 2,2015, among GCI HOLDINGS, INC., GCI, INC., the SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto,MUFG UNION BANK, N.A., and SUNTRUST BANK, as Co‑Syndication Agents, BANK OF AMERICA, N.A., asDocumentation Agent, and CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Administrative Agent.RECITALSThis Fourth Amended and Restated Credit and Guarantee Agreement amends, restates, replaces and supersedes, in itsentirety, without a breach in continuity and without constituting a novation, the Third Amended and Restated Credit and GuaranteeAgreement, dated as of April 30, 2013 (as amended to but excluding the Fourth Restatement Closing Date (as defined below), the“Existing Credit Agreement”), among the Borrower, the subsidiary guarantors party thereto, the lenders party thereto, the other partiesthereto and Credit Agricole CIB, as the administrative agent.The Borrower acknowledges that on the Fourth Restatement Closing Date (as hereinafter defined), the Borrower has(1) Existing Revolving Loans (as hereinafter defined) in the outstanding principal amount of $81,489,372.21, (1) Existing Term Loans(as hereinafter defined) in the outstanding principal amount of $240,000,000, and (1) no Add‑on Term Loans (as hereinafter defined).For convenience, references to certain matters related to the period prior hereto have been deleted.Accordingly, the parties hereto agree as follows:Article 1 DEFINITIONSSection 1.1. Defined TermsAs used in this Agreement, the following terms have the meanings specified below:“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising suchBorrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.“ABR Floor” means 2.00%.“Acquisition” has the meaning set forth in Section 7.5.“ACS Wireless” means ACS Wireless, Inc., an Alaska corporation.“Add‑on Term Loan” has the meaning set forth in the Existing Credit Agreement.1821445.29\C072091\0303228“Additional Refinancing Lender” shall mean, at any time, any bank, financial institution or other institutional lender orinvestor that agrees to provide any portion of Credit Agreement Refinancing Debt pursuant to a Refinancing Amendment inaccordance with Section 2.14; provided that each Additional Refinancing Lender shall be subject to the approval of (i) theAdministrative Agent, such approval not to be unreasonably withheld or delayed, to the extent that each such Additional RefinancingLender is not then an existing Lender, an Affiliate of a then existing Lender or an Approved Fund, and (ii) the Borrower.“Adjusted Operating Cash Flow” means, with respect to any Person, (1) Operating Cash Flow of such Person adjusted,on a consistent basis, to give effect to each acquisition, disposition and merger that occurred during the relevant period as if each hadoccurred on the first day of such period, plus (1) additional costs and expenses (including, without limitation, additional handset costs)of the Borrower and the Subsidiaries incurred during the relevant period but prior to the first anniversary of the Fourth RestatementClosing Date arising out of the AWN Transaction and the Borrower’s business plan with respect to AWN, but not in excess of$25,000,000, plus (1) costs and expenses of the Borrower and the Subsidiaries incurred during the relevant period in connection with,and cost savings and synergies to be realized within 12 months of the consummation of, Acquisitions consummated pursuant toSection 7.5(e), provided that the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officersetting forth such Responsible Officer’s good faith estimate, in reasonable detail, of such reasonably anticipated costs, expenses, costsavings and synergies, provided further that in no event shall the amount under this clause (c) for the relevant period exceed 10% ofAdjusted Operating Cash Flow for such period immediately prior to giving effect to any adjustment pursuant to this clause (c).“Administrative Agent” means Credit Agricole CIB, in its capacity as administrative agent for the Lenders hereunder,or any successor thereto appointed pursuant to Article 9.“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the AdministrativeAgent.“Affected Sale” has the meaning set forth in Section 2.7(d).“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or moreintermediaries, Controls or is Controlled by or is under common Control with the Person specified.“Agents” means, collectively, the Administrative Agent, the Syndication Agent and the Documentation Agent.“Aggregate Increased Revolving Amount” has the meaning set forth in Section 2.5(d)(B).“Agreement” means this Fourth Amended and Restated Credit and Guarantee Agreement, as amended, restated,supplemented or otherwise modified from time to time.21821445.29\C072091\0303228“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (i) the Prime Rate in effect on suchday, (ii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (iii) the One Month LIBO Rate plus 1%. Anychange in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the One Month LIBO Rateshall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the OneMonth LIBO Rate, respectively.“Amortization Event” has the meaning set forth in Section 2.7(c).“Amortization Termination Event” has the meaning set forth in Section 2.7(c).“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Parent or itsSubsidiaries from time to time concerning or relating to bribery or corruption.“Applicable Margin” means:(a) (X) Prior to the Fourth Restatement Closing Date, the Applicable Margin (as defined in the Existing CreditAgreement), and (Y) with respect to Borrowings of Existing Facility Loans and Swingline Loans at all times from and after the FourthRestatement Closing Date, (i) with respect to each ABR Borrowing and each Swingline Loan, the per annum rate equal to thepercentage set forth below under the heading “ABR Margin” during the applicable periods set forth below, and (ii) with respect toeach Eurodollar Borrowing and the fees payable under Section 3.3(b)(i), the per annum rate equal to the percentage set forth belowunder the heading “Eurodollar and LC Fee Margin” during the applicable periods set forth below, provided that until the deliverypursuant to Section 6.1(c) of the Compliance Certificate for the second full fiscal quarter after the Fourth Restatement Closing Date, theTotal Leverage Ratio shall (solely for purposes of determining the Applicable Margin) be deemed to equal the Total Leverage Ratio ineffect immediately preceding the Fourth Restatement Closing Date:When the Total Leverage Ratio is:ABR MarginEurodollar and LC FeeMarginLess ThanGreater Than or Equal to 5.5:1.02.00%3.00%5.5:1.05.0:1.01.75%2.75%5.0:1.04.5:1.01.50%2.50%4.5:1.04.0:1.01.25%2.25%4.0:1.0 1.00%2.00%(b) With respect to Borrowings consisting of Term B Loans (1) in the case of Eurodollar Borrowings, 3.75% perannum, and (1) in the case of ABR Borrowings, 2.75% per annum.Changes in the Applicable Margin resulting from a change in the Total Leverage Ratio shall be based upon the Compliance Certificatemost recently delivered under Section 6.1(c) and shall31821445.29\C072091\0303228become effective on the date such Compliance Certificate is received by the Administrative Agent. Notwithstanding anything to thecontrary in this definition, if the Borrower shall fail to deliver to the Administrative Agent a Compliance Certificate on or prior to anydate required hereby, then solely for purposes of determining the “Applicable Margin”, the Total Leverage Ratio shall be deemed to begreater than or equal to 5.5:1.0 from and including such date to the date of receipt by the Administrative Agent of such certificate. Inthe event that any financial statement or certification delivered pursuant to Section 6.1 is shown to be inaccurate, and such inaccuracy,if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than theApplicable Margin applied for such Applicable Period, the Borrower shall immediately (a) deliver to the Administrative Agent acorrected compliance certificate for such Applicable Period, (b) determine the Applicable Margin for such Applicable Period basedupon the corrected compliance certificate, and (c) immediately pay to the Administrative Agent for the benefit of the Lenders theaccrued additional interest and other fees owing as a result of such increased Applicable Margin for such Applicable Period, whichpayment shall be promptly distributed by the Administrative Agent to the Lenders entitled thereto.“Applicable Percentage” means, with respect to any Revolving Lender, the percentage of the total RevolvingCommitments represented by such Lender’s Revolving Commitment. If the Revolving Commitments have terminated or expired, theApplicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to anyassignments.“Approved Debt” means Indebtedness incurred by the Parent or any subsidiary thereof (other than NMTC Subsidiaries)(a) having a final stated maturity date that is earlier than the Permitted Debt Maturity Date, and (b) in an aggregate principal amount atany one time outstanding not in excess of $10,000,000.“Approved Fund” means any Person (other than a natural person) that is primarily engaged in making, purchasing,holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered or managed by (a) aLender, (b) an Affiliate of a Lender or (c)(i) an entity or an Affiliate of an entity that administers or manages a Lender or (ii) an entityor an Affiliate of an entity that is the investment advisor to a Lender.“Arrangers” means SunTrust Robinson Humphrey, Inc., Credit Agricole CIB, and Merrill Lynch, Pierce, Fenner &Smith Incorporated, in their capacities as Co-Lead Arrangers of the credit facility evidenced by this Agreement.“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with theconsent of any party whose consent is required by Section 10.4(b)(iii)), and accepted by the Administrative Agent, substantially in theform of Exhibit A or any other form approved by the Administrative Agent and the Borrower.“Authorization” means, collectively, (a) any FCC License, (b) any Franchise, or (c) any other franchise, franchiseapplication, ordinance, agreement, permit, license, order, certificate, registration, qualification, variance, license, approval, permit orother form of permission, consent41821445.29\C072091\0303228or authority issued by the FCC, any State PUC, or any other Governmental Authority regulating the ownership or operation of theCommunications Business.“AWN” means The Alaska Wireless Network, LLC, a Delaware limited liability company.“AWN Purchase Agreement” means the Purchase and Sale Agreement, dated as of December 4, 2014, by and amongAlaska Communications Systems Group, Inc., ACS Wireless, Inc., GCI Communication Corp., GCI Wireless Holdings, LLC,General Communication, Inc. and The Alaska Wireless Network, LLC pursuant to which GCI Wireless will purchase all of ACSWireless’ Equity Interests in AWN.“AWN Transaction” means the acquisition by GCI Wireless of all of the AWN equity interests held by ACS Wirelessand subscribers, as contemplated by the AWN Purchase Agreement.“Board” means the Board of Governors of the Federal Reserve System of the United States of America.“Borrower” means GCI Holdings, Inc., an Alaska Corporation.“Borrowing” means Loans of the same Type and Class, converted or continued on the same date and, in the case ofEurodollar Loans, as to which a single Interest Period is in effect.“Borrowing Request” means a Borrowing Request, substantially in the form of Exhibit C.“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New YorkCity are authorized or required by law to remain closed, provided that, when used in connection with a Eurodollar Loan, the term“Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbankmarket.“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under anylease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations arerequired to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of suchobligations shall be the capitalized amount thereof determined in accordance with GAAP.“Cash Equivalents” means:(a) securities issued or directly and fully guaranteed or insured by the United States government or any agency orinstrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof), maturing not more thanone year from the date of acquisition;(b) certificates of deposit, dollar time deposits and eurodollar time deposits with maturities of one year or less from thedate of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with anyCredit Party making such51821445.29\C072091\0303228deposits available in the ordinary course of business, First National Bank of Alaska, Northrim Bank or any domestic commercial bankhaving capital and surplus in excess of $500,000,000 and a rating at the time of acquisition thereof of “P-2” or better from Moody’s or“A-2” or better from S&P;(c) repurchase obligations for underlying securities of the types described in clauses (a) and (b) above entered intowith any financial institution meeting the qualifications specified in clause (b) above;(d) commercial paper issued by a corporation (other than an Affiliate of the Borrower) rated at least “P-1” or higherfrom Moody’s or “A-1” or higher from S&P, and in each case maturing within one year after the date of acquisition;(e) securities issued and fully guaranteed by any state, commonwealth or territory of the United States, or by anypolitical subdivision or taxing authority thereof, rated at least “A2” by Moody’s or at least “A” by S&P and in each case havingmaturities of not more than one year from the date of acquisition; and(f) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described inclauses (a) through (e) of this definition or cash.“Cash Interest Expense” means, for any Person for any period, an amount equal to (a) the interest expense (including,without limitation, the interest component of Capital Lease Obligations) of such Person and its subsidiaries during such perioddetermined on a consolidated basis in accordance with GAAP, but without taking into account any payments, accruals or other itemswhatsoever under or with respect to any Interest Rate Derivative, minus (b) all payments (including, without limitation, all initialpayments, periodic payments and termination payments) received by such Person and its subsidiaries during such period on aconsolidated basis under all Interest Rate Derivatives, plus (c) all payments (including, without limitation, all initial payments, periodicpayments and termination payments) made by such Person and its subsidiaries during such period on a consolidated basis under allInterest Rate Derivatives.In the event that such Person incurs, assumes, guarantees or repays any Indebtedness subsequent to the commencementof the period for which Cash Interest Expense is being calculated, then Cash Interest Expense shall be calculated giving pro formaeffect to such incurrence, assumption, guarantee or repayment of Indebtedness as if the same had occurred at the beginning of theapplicable period.“Change in Control” means the occurrence of one or more of the following events: (1) any sale, lease, exchange orother transfer (in one transaction or a series of related transactions), but other than by way of merger or consolidation, of all orsubstantially all of the assets of GCI or the Parent to any Person or group of related Persons for purposes of Section 13(d) of theSecurities Exchange Act of 1934 (a “Group”), together with any Affiliates thereof (whether or not otherwise in compliance with theprovisions hereof) other than to the Permitted Holders; (2) the approval by the holders of Equity Interests of GCI or the Parent, as thecase may be, of any plan or proposal for the liquidation or dissolution of GCI or the Parent, as the case may be (whether or nototherwise in compliance with the provisions hereof); (3) any Person or Group (other than the Permitted Holders,61821445.29\C072091\0303228any entity formed for the purpose of owning Equity Interests of the Parent or any direct or indirect wholly owned subsidiary of GCI)shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinaryvoting power represented by Equity Interests of GCI or the Parent; or (4) the failure of the Parent to own directly, beneficially and ofrecord, 100% of the aggregate voting power and economic interests represented by the issued and outstanding Equity Interests of theBorrower on a fully diluted basis.“Change in Law” means (i) the adoption of any law, rule or regulation by any Governmental Authority after the FourthRestatement Closing Date, (ii) any change in any law, rule or regulation or in the interpretation or application thereof by anyGovernmental Authority after the Fourth Restatement Closing Date or (iii) compliance by any Credit Party (or, for purposes ofSection 3.5(b), by any lending office of such Credit Party or by such Credit Party’s holding company, if any) with any request,guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the FourthRestatement Closing Date; provided that notwithstanding anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform andConsumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (b) allrequests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on BankingSupervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to BaselIII, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.“Class” means (i) when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loanscomprising such Borrowing, are Revolving Loans under the Existing Revolving Facility, Existing Term Loans, Term B Loans, atranche of Incremental Term Loans, a Refinancing Series of Refinancing Revolving Loans, a Refinancing Series of Refinancing TermLoans, Extended Term Loans from the same Extension, Extended Revolving Loans from the same Extension, or Swingline Loans and(ii) when used in reference to any Lender, refers to such Lender in its capacity as a holder of Revolving Loans under the ExistingRevolving Facility, Existing Term Loans, Term B Loans, Incremental Term Loans of a particular tranche, Refinancing RevolvingLoans of a particular Refinancing Series, Refinancing Term Loans of a particular Refinancing Series, Extended Term Loans from aparticular Extension or Revolving Term Loans from a particular Extension, as applicable.“CoBank” means CoBank, ACB.“CoBank Equities” means, as of any date, any and all Equity Interests issued by CoBank and held by one or more ofthe Loan Parties.“Code” means the Internal Revenue Code of 1986.“Collateral” means any property of any Loan Party which, pursuant to any Security Document, secures any or all of theObligations.“Commitment Fee Rate” means (X) prior to the Fourth Restatement Closing Date, the Commitment Fee Rate (asdefined in the Existing Credit Agreement), and (Y) at all times from71821445.29\C072091\0303228and after the Fourth Restatement Closing Date, the per annum rate equal to the percentage set forth below under the heading“Commitment Fee Rate” during the applicable periods set forth below, provided that until the delivery pursuant to Section 6.1(c) of theCompliance Certificate for the second full fiscal quarter after the Fourth Restatement Closing Date, the Total Leverage Ratio shall(solely for purposes of determining the Commitment Fee Rate) be deemed to equal the Total Leverage Ratio in effect immediatelypreceding the Fourth Restatement Closing Date:When the Total Leverage Ratio is:Commitment Fee RateLess ThanGreater Than or Equal to 4.5:1.00.500%4.5:1.0 0.375%Changes in the Commitment Fee Rate resulting from a change in the Total Leverage Ratio shall be based upon the ComplianceCertificate most recently delivered under Section 6.1(c) and shall become effective on the date such Compliance Certificate is receivedby the Administrative Agent. Notwithstanding anything to the contrary in this definition, if the Borrower shall fail to deliver to theAdministrative Agent a Compliance Certificate on or prior to any date required by Section 6.1(c), then solely for purposes ofdetermining the “Commitment Fee Rate”, the Total Leverage Ratio shall be deemed to be equal to or greater than 4.5:1.0 from andincluding such date to the date of receipt by the Administrative Agent of such certificate.“Commitments” means, collectively, the Revolving Commitments, the Term B Loan Commitments and, if existing, theIncremental Term Commitments, the Refinancing Revolving Commitments, the Refinancing Term Commitments, the ExtendedRevolving Commitments and commitments with respect to Extended Term Loans.“Communications Act” means the Federal Communications Act of 1934, and the rules and regulations issuedthereunder.“Communications Business” means the cable (including without limitation cable television), local access, wireline andwireless (whether fixed or mobile) communications systems and other businesses (including long distance, data and internet services)of the Borrower and the Subsidiaries (other than NMTC Subsidiaries) generally.“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. §1 et seq.), and the rules and regulationsissued thereunder.“Compliance Certificate” means a certificate, substantially in the form of Exhibit G.“Compliance Certificate Delivery Date” means the date on which a Compliance Certificate is delivered to theAdministrative Agent in accordance with Section 6.1(c).81821445.29\C072091\0303228“Compliance Certificate Reference Date” means, with respect to each Compliance Certificate delivered to theAdministrative Agent in accordance with Section 6.1(c), the end date of the fiscal period for the financial statements to which suchCompliance Certificate relates.“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the managementor policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms “Controlling” and“Controlled” have meanings correlative thereto.“Copyright Act” means The Copyright Act of 1976.“Credit Agreement Refinancing Debt” means Indebtedness issued, incurred or otherwise obtained (including by meansof the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, replace, repurchase, retire or refinance, inwhole or part, Revolving Loans, Existing Term Loans, Term B Loans, Incremental Term Loans, Extended Term Loans or any thenexisting Credit Agreement Refinancing Debt (“Refinanced Debt”); provided that (i) such Indebtedness has a maturity no earlier than,and a Weighted Average Life to Maturity equal to or greater than, the Refinanced Debt, (ii) such Indebtedness shall not have a greaterprincipal amount than the principal amount of the related Refinanced Debt plus accrued interest, fees, premiums (if any) and penaltiesthereon and reasonable fees and expenses associated with the refinancing, (iii) such Indebtedness shall not be secured by any assetsthat do not constitute Collateral, (iv) such Indebtedness is not at any time guaranteed by any Subsidiaries other than SubsidiaryGuarantors, (v) such Indebtedness shall rank pari passu or junior in right of payment and of security (if any) with the other Loans, (vi)such Refinanced Debt shall be repaid, repurchased, retired, defeased or satisfied and discharged, and all accrued interest, fees,premiums (if any) and penalties in connection therewith shall be paid, on the date such Credit Agreement Refinancing Debt is issued,incurred or obtained, (vii) such Indebtedness shall have such pricing (including interest rate margins, rate floors, fees, premiums andfunding discounts) and optional prepayment terms as may be agreed by the Borrower and the Additional Refinancing Lenders thereof,and (viii) the terms and conditions of such Indebtedness (except as otherwise provided in clause (vii) above and with respect to pricing(including interest rate margin, rate floors, fees, premiums and funding discounts) and optional prepayment or redemption terms) aresubstantially identical to, or are not materially more favorable, taken as a whole, to the lenders or holders providing such Indebtedness(in the good faith determination of the Borrower and the Administrative Agent) than those applicable to the Refinanced Debt beingrefinanced (except for covenants or other provisions applicable only to periods after the Latest Maturity Date at the time of incurrenceof such Indebtedness).“Credit Agricole CIB” means Credit Agricole Corporate and Investment Bank and its successors.“Credit Parties” means the Administrative Agent, the Issuing Bank, the Swingline Lender and the Lenders.“Default” means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or bothwould, unless cured or waived, become an Event of Default under Article 8.91821445.29\C072091\0303228“Defaulting Lender” means any Lender, as reasonably determined by the Administrative Agent (and the AdministrativeAgent shall promptly notify the parties hereto after making such determination), that has (1) failed to fund any portion of its Loans orparticipations in Letters of Credit or Swingline Loans within three Business Days of the date required to be funded by it hereunder,unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’sdetermination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicabledefault, shall be specifically identified in such writing) has not been satisfied, (1) notified any Loan Party or any Credit Party in writingthat it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effectthat it does not intend to comply with its funding obligations under this Agreement, unless such writing or public statement relates tosuch Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that acondition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in suchwriting or public statement) cannot be satisfied, (1) failed, three Business Days after written request by the Administrative Agent or theBorrower (at any time the Administrative Agent or the Borrower) shall have reasonably determined that such Lender may fail tocomply with the terms of this Agreement relating to its obligations to fund prospective Loans or participations in then outstandingLetters of Credit or Swingline Loans), to confirm it will comply with the terms of this Agreement relating to such obligations hereunder(provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmationby the Administrative Agent and the Borrower), (1) otherwise failed to pay over to the Administrative Agent or any other Lender anyother amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faithdispute, or (1)(1) become or is insolvent or has a direct or indirect parent company that has become or is insolvent or (1) become thesubject of a bankruptcy or insolvency proceeding, or has had a receiver, interim receiver, receiver and manager, administrator,liquidator, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to,approval of or acquiescence in any such proceeding or appointment or has a direct or indirect parent company that has become thesubject of a bankruptcy or insolvency proceeding, or has had a receiver, interim receiver, receiver and manager, administrator,liquidator, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to,approval of or acquiescence in any such proceeding or appointment. For the avoidance of doubt, the mere acquisition or maintenanceby a Governmental Authority of a Lender in and of itself will not cause a Lender to be a “Defaulting Lender” as long as it does notresult in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement ofjudgments or writs of attachment on its assets, or permits such Lender (or such Governmental Authority) to reject, repudiate, disavow ordisaffirm any contracts or agreements made with such Lender.“Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 4.6.“Disqualified Equity” means any Equity Interest of any Person that, by its terms (or by the terms of any security intowhich it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event, maturesor is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder101821445.29\C072091\0303228thereof, in whole or in part, or requires or mandates payments or distributions, on or prior to the date that is one year after the Term BMaturity Date; provided, however, that an Equity Interest that would constitute Disqualified Equity solely because the holders thereofhave the right to require such Person to repurchase or redeem such Equity Interests upon the occurrence of one or more certain eventsshall not constitute Disqualified Equity if the terms of such Equity Interest provide that such Person may not repurchase or redeem anysuch Equity Interest unless such repurchase or redemption complies with Section 7.8. The term “Disqualified Equity” shall also includeany option, warrant or other right that is convertible into Disqualified Equity or that is redeemable at the option of the holder, orrequired to be redeemed, prior to the date that is one year after the Term B Maturity Date.“Documentation Agent” means Bank of America, N.A., in its capacity as a documentation agent hereunder.“dollars” or “$” refers to lawful money of the United States of America.“Effective Yield” means, as of any date of determination (1) with respect to the Term B Loans, the sum of (1) thehigher of (x) the LIBO Rate on such date for a deposit in Dollars with a maturity of one month and (y) the LIBO Floor, (1) theApplicable Margin for Term B Eurodollar Borrowings, and (1) the amount of original issue discount and upfront fees thereon(converted to yield assuming the lesser of (x) a four year average life and (y) the remaining life to maturity, and without any presentvalue discount), but excluding the effect of any arrangement, structuring, underwriting and syndication fees and other fees payable inconnection therewith that are not shared with and generally paid to Term B Lenders, and (1) with respect to any other Indebtedness,the sum of (1)(A) the fixed rate of interest therefor, or (B) if the rate of interest applicable thereto is not a fixed rate, the sum of (I) thehigher of (x) any eurodollar base rate (or, if no eurodollar base rate, any other base rate then applicable) for the calculation of interestthereon, and (y) any floor on such base rate, and (II) any margin for the calculation of interest thereon based on the applicable baserate, and (1) the amount of original issue discount and upfront fees thereon (converted to yield assuming the lesser of (x) a four yearaverage life and (y) the remaining life to maturity, and without any present value discount), but excluding the effect of anyarrangement, structuring, underwriting and syndication fees and other fees payable in connection therewith that are not shared with andgenerally paid to the lenders with respect to such Indebtedness.“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions,notices or binding agreements issued, promulgated or entered into by any Governmental Authority having the force or effect of law orregulation, relating in any way to the environment, preservation or reclamation of natural resources, or the management, release orthreatened release of any Hazardous Material.“Environmental Liability” means, as to any Person, any liability, contingent or otherwise (including any liability fordamages, costs of environmental remediation, fines, penalties or indemnities), of such Person directly or indirectly resulting from orbased upon (i) violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal ofany Hazardous Materials, (iii) exposure to any Hazardous Materials, (iv) the release or threatened release of any Hazardous Materialsinto the environment or (v) any contract, agreement111821445.29\C072091\0303228or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.“Equity Interest” means (a) a share of corporate stock, a partnership interest, a membership interest in a limited liabilitycompany, any interest that confers on a Person the right to receive a share of the profits and losses of the issuing Person and any otherinterest (other than to the extent constituting a debt) that confers on a Person the right to receive a share of the distribution of assetsupon the liquidation of the issuing Person and (b) all warrants, options or other rights to acquire any Equity Interest set forth in clause(a) of this defined term (but excluding any debt security that is convertible into, or exchangeable for, any such Equity Interest).“ERISA” means the Employee Retirement Income Security Act of 1974.“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, istreated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412of the Code, is treated as a single employer under Section 414 of the Code.“ERISA Event” means (i) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issuedthereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (ii) the existence with respect toany Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or notwaived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of theminimum funding standard with respect to any Plan; (iv) the incurrence by the Borrower or any ERISA Affiliate of any liability underTitle IV of ERISA with respect to the distress termination of any Plan; (v) the receipt by the Borrower or any ERISA Affiliate from thePBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administerany Plan under Section 4042 of ERISA; (vi) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to thewithdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii) the receipt by the Borrower or any ERISA Affiliate ofany notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning theimposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,within the meaning of Title IV of ERISA.“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprisingsuch Borrowing, are bearing interest at a rate determined by reference to the LIBO Rate.“Event of Default” has the meaning assigned to such term in Article 8.“Excluded Collateral” means interests of the Borrower and the Subsidiary Guarantors in (a) the following interests inReal Property (except to the extent that a lien thereon may be perfected by the filing of a uniform commercial code financingstatement): (i) interests in Real Property owned or held by the Borrower or any Subsidiary Guarantor on the Fourth RestatementClosing Date, (ii) fee interests in Real Property acquired after the Fourth Restatement Closing Date121821445.29\C072091\0303228not in excess of $20,000,0000 in respect of any individual parcel (or contiguous parcels) of Real Property, or $40,000,000 in theaggregate, and (iii) leasehold interests in Real Property, (b) patents, trademarks and copyrights (other than any patents, trademarks andcopyrights constituting Collateral immediately prior to the Fourth Restatement Closing Date) not in excess of $10,000,000 in theaggregate, (c) joint ventures (other than any joint ventures constituting Collateral immediately prior to the Fourth Restatement ClosingDate) not in excess of $10,000,000 individually or $20,000,000 in the aggregate, and (d) personal property acquired after the FourthRestatement Closing Date not included in the definition of “Collateral” as defined in the Security Agreement.“Excluded Subsidiary” means United Utilities, Inc., an Alaska corporation, Unicom, Inc., an Alaska corporation,United-KUC, Inc., an Alaska corporation, GCI Community Development, LLC, an Alaska limited liability company, United2, LLC,an Alaska limited liability company, Denali Media Juneau, Corp., an Alaska corporation, Denali Media Southeast, Corp., an Alaskacorporation, Denali Media Anchorage, Corp., an Alaska corporation, each NMTC Subsidiary, any future Subsidiary designated as an“Excluded Subsidiary” by the Borrower in a written notice delivered to the Administrative Agent in accordance with Section 6.11, andeach existing and future subsidiary of each of the foregoing.“Excluded Swap Obligations” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, allor a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such SwapObligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of theCommodity Futures Trading Commission (or the application of or official interpretation of any thereof) by virtue of such Guarantor’sfailure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulationsthereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to suchSwap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall applyonly to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomesillegal.“Excluded Taxes” means, with respect to any Credit Party or any other recipient of any payment to be made by or onaccount of any obligation of any Loan Party under any Loan Document, (i) net income or net profits, net worth, capital and franchiseTaxes imposed in lieu of net income Taxes imposed (A) by the United States of America or by the jurisdiction (or any politicalsubdivision thereof) under the laws of which such recipient (or, in the case of a pass through entity, any of its beneficial owners) isorganized or in which its principal office is located or, in the case of any Credit Party, in which its applicable lending office is locatedor (B) as a result of a present or former connection between such recipient or such beneficial owner thereof and the jurisdiction of theGovernmental Authority imposing such Tax or any political subdivision or taxing authority thereof or therein (other than any suchconnection arising solely from such recipient having executed, delivered or performed its obligations or received a payment under, orenforced, any Loan Document), (ii) any branch profits Taxes imposed by the United States of America or any similar Tax imposed byany other jurisdiction in which such Loan Party is organized or in which its principal office is located or, in the case of any CreditParty, in which its applicable lending office is located, (iii) in the case of a Foreign Lender, United States federal withholding Taxes,including backup131821445.29\C072091\0303228withholding Taxes, imposed on amounts payable to such Foreign Lender unless such Taxes are imposed as a result of a change in theapplicable statute, regulation or treaty occurring after such Lender becomes a party hereto (or designates a new lending office), exceptto the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (orassignment), to receive additional amounts from such Loan Party with respect to such Taxes pursuant to Section 3.7, (iv) Taxesresulting from a Lender’s (or, in the case of a pass-through entity, any of its beneficial owners’) failure to comply with Section 3.7(e) or(f), and (v) any United States federal withholding taxes imposed under FATCA.“Existing Credit Agreement” has the meaning set forth in the Recitals.“Existing Facility Loan” means a Revolving Loan under the Existing Revolving Facility or an Existing Term Loan.“Existing Facility Maturity Date” means April 30, 2018.“Existing Letter of Credit” means each letter of credit listed on Schedule 1.1B.“Existing Revolving Facility” means the Revolving Commitments other than Extended Revolving Commitments andRefinancing Revolving Commitments and the Revolving Loans other than Extended Revolving Loans and Refinancing RevolvingLoans.“Existing Revolving Loans” means Revolving Loans under and as defined in the Existing Credit Agreement.“Existing Term Lender” means a Lender that holds an Existing Term Loan.“Existing Term Loan” means a Delayed Draw Term Loan (as defined in the Existing Credit Agreement).“Extended Revolving Commitment” has the meaning given to such term in Section 2.15(a).“Extended Revolving Loans” means Loans made to the Borrower pursuant to Extended Revolving Commitments.“Extended Term Loans” has the meaning given to such term in Section 2.15(a).“Extending Revolving Lender” has the meaning given to such term in Section 2.15(a).“Extending Term Lender” has the meaning given to such term in Section 2.15(a).“Extension” has the meaning given to such term in Section 2.15(a).“Extension Amendment” means an amendment to this Agreement in connection with an Extension as described inSection 2.15(c).141821445.29\C072091\0303228“Extension Offer” has the meaning given to such term in Section 2.15(a).“Facilities” means, collectively, the following facilities: (1) the Existing Term Loans, (1) the Term B Commitments andthe Term B Loans, (1) Incremental Term Commitments and Incremental Term Loans of the same Class, (1) the Existing RevolvingFacility, and (1) any other Class of Loans and any related Commitments.“Facility Amendment” means an Incremental Term Facility Amendment, a Revolving Increase Supplement, aRefinancing Amendment or an Extension Amendment.“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or anyamended or successor version that is substantively comparable and not materially more onerous to comply with), and any current orfuture regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the InternalRevenue Code, any intergovernmental agreement entered into to implement such Sections of the Internal Revenue Code, and any lawsrules and practices adopted by a non-US jurisdiction to effect any such intergovernmental agreement.“FCC” means the Federal Communications Commission, or any Governmental Authority succeeding to the functionsthereof.“FCC License” means any governmental approval or authorization issued by the FCC pursuant to the CommunicationsAct or otherwise that authorizes a Person to transmit or receive radio waves, microwaves or other signals (whether terrestrial orotherwise).“Federal Funds Effective Rate” means, for any day, a rate per annum equal to the weighted average of the rates onovernight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, aspublished by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if the day forwhich such rate is to be determined is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on suchtransactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if such rate is not sopublished for any day, the Federal Funds Effective Rate for such day shall be the average of the quotations for such day on suchtransactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by it.“Financial Covenant Credit Exposure” means, with respect to any Lender at any time, the sum of such Lender’sRevolving Credit Exposure and Term Loans for all Financial Covenant Facilities.“Financial Covenant Facility” means any Loan or Commitment under any Facility other than a Non-FinancialCovenant Facility.“Financial Covenant Lender” means a Lender with a Commitment, or that holds a Loan, under a Financial CovenantFacility.151821445.29\C072091\0303228“Financial Covenants” means the covenants set forth in Sections 7.16, 7.17 and 7.18.“Financial Officer” means, with respect to any Person, the chief financial officer, principal accounting officer, treasurer,controller, senior vice president-finance or vice president-finance of such Person.“Forecasts” has the meaning assigned to such term in Section 4.4(b).“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which theapplicable Loan Party is located. For purposes of this definition, the United States of America, each State thereof and the District ofColumbia shall be deemed to constitute a single jurisdiction.“Fourth Restatement Closing Date” has the meaning assigned to such term in Section 5.1.“Franchises” means all franchises and franchise applications required in connection with the Communications Business,other than FCC Licenses.“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America.“GCI” means General Communication, Inc., an Alaska corporation.“GCI Wireless” means GCI Wireless Holdings, LLC, an Alaska limited liability company.“Governmental Authority” means the government of the United States of America, any other nation or any politicalsubdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or otherentity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantorguaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primaryobligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (i) to purchaseor pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advanceor supply funds for the purchase of) any security for the payment thereof; (ii) to purchase or lease property, securities or services for thepurpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equitycapital or any other financial statement condition or liquidity of the primary obligor as to enable the primary obligor to pay suchIndebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued to support suchIndebtedness or obligation, provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinarycourse of business. The amount of any Guarantee of any guaranteeing person161821445.29\C072091\0303228shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect ofwhich such Guarantee is made and (b) the maximum amount for which such guarantor may be liable pursuant to the terms of theinstrument embodying such Guarantee in accordance with GAAP. The term “guarantee” or “guaranteed” as a verb has a correlativemeaning thereto.“Guarantee Supplement” means a Guarantee Supplement in the form of Exhibit I.“Guarantors” means the Parent and the Subsidiary Guarantors.“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances,wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinatedbiphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to anyEnvironmental Law.“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodityprice protection agreement or other interest or currency exchange rate or commodity price swap, cap, collar, hedging or other likearrangement.“High Ratio Condition” means, as of any date, that either (a) the Senior Leverage Ratio exceeds 2.75:1.00, or (b) theTotal Leverage Ratio exceeds 5.70:1.00.“Incremental Amount” means, as of the date of any increase of the Revolving Commitments pursuant to Section 2.5(d)or the making of any Incremental Term Loan, (1) $200,000,000, plus (1) after the utilization of amounts provided for in clause (a), anamount which, after giving effect to such increase of the Revolving Commitments or making of such Incremental Term Loan wouldnot cause the Senior Leverage Ratio to be more than 2.50:1.00 as of the last day of the most recently ended period of four fiscalquarters of the Borrower for which financial statements have been delivered to the Administrative Agent pursuant to Section 6.1,determined on the date of such increase in the Revolving Commitments or the making of such Incremental Term Loans, as the casemay be, after giving effect to any such increase and incurrence on a pro forma basis, and, in each case, (x) excluding, for purposes ofdetermining the Senior Leverage Ratio, the cash proceeds of any such Incremental Term Loans and the cash proceeds of anysubstantially contemporaneous Revolving Loan, and (y) assuming that the Revolving Commitments are fully drawn.“Incremental Term Commitments” means commitments of one or more Incremental Term Lenders to a tranche of anIncremental Term Facility as set forth in the relevant Incremental Term Facility Amendment.“Incremental Term Facilities” has the meaning specified in Section 2.13(a).“Incremental Term Facility Amendment” has the meaning specified in Section 2.13(d).171821445.29\C072091\0303228“Incremental Term Lender” has the meaning specified in Section 2.13(d).“Incremental Term Loan Maturity Date” means, with respect to any Incremental Term Loan Facility, the final maturitydate applicable to the Incremental Term Loans thereunder.“Incremental Term Loans” has the meaning specified in Section 2.13(a).“Indebtedness” of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) allobligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person underconditional sale or other title retention agreements relating to property acquired by such Person, (iv) all obligations of such Person inrespect of the deferred purchase price of property (excluding accounts payable incurred in the ordinary course of business), (v) allIndebtedness of others secured by (or for which the holder of such Indebtedness has an existing right to be secured by) any Lien onproperty owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (vi) all Guarantees bysuch Person of Indebtedness of others, (vii) all Capital Lease Obligations of such Person, (viii) all obligations, contingent or otherwise,of such Person as an account party in respect of letters of credit and letters of guaranty, (ix) all obligations, contingent or otherwise, ofsuch Person in respect of bankers’ acceptances, and (x) Disqualified Equity. The Indebtedness of any Person shall include theIndebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liabletherefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of suchIndebtedness provide that such Person is not liable therefor.“Indemnified Taxes” means Taxes other than Excluded Taxes.“Indemnitee” has the meaning assigned to such term in Section 10.3(b).“Interest Coverage Ratio” means, as of any date, the ratio of (i) Adjusted Operating Cash Flow of the Parent to (ii)Cash Interest Expense of the Parent, in each case for the most recently completed four fiscal quarters in respect of which a ComplianceCertificate has been delivered in accordance with Section 6.1(c).“Interest Election Request” means an Interest Election Request, substantially in the form of Exhibit D.“Interest Expense” means, for any Person for any period, the interest expense (including, without limitation, the interestcomponent of Capital Lease Obligations) of such Person and its subsidiaries during such period determined on a consolidated basis inaccordance with GAAP.“Interest Payment Date” means (1) with respect to each ABR Loan, the last day of each March, June, September andDecember, (1) with respect to each Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which suchLoan is a part and, in the case of a Eurodollar Loan with an Interest Period of more than three months duration, each day prior to thelast day of such Interest Period that occurs at intervals of three months duration after the first day of such Interest Period, (1) withrespect to each Existing Facility Loan, the Existing Facility Maturity181821445.29\C072091\0303228Date, (1) with respect to each Term B Loan, the Term B Maturity Date, and (1) with respect to each Swingline Loan, the day that suchSwingline Loan is required to be repaid pursuant to Section 2.6(a), and (vi) with respect to each Incremental Term Loan, RefinancingRevolving Loan, Refinancing Term Loan, Extended Revolving Loan and Extended Term Loan, the Maturity Date with respect tosuch Loan.“Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the date of suchBorrowing and ending one month, two months, three months or six months thereafter, as the Borrower may elect, or such other periodas each Lender affected thereby may agree in each such Lender’s sole discretion, provided that (i) if any Interest Period would end ona day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless, in the case of anyInterest Period of at least one month, such next succeeding Business Day would fall in the next calendar month, in which case suchInterest Period shall end on the next preceding Business Day, and (ii) any Interest Period of at least one month that commences on thelast Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month ofsuch Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the dateof a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recentconversion or continuation of such Borrowing.“Interest Rate Derivative” means any interest rate swap, cap or collar agreement.“Investments” has the meaning assigned to such term in Section 7.4.“IRU” shall mean any agreement whereby one Person grants the exclusive and irrevocable right to use conduit, darkfiber, lit fiber (including associated electronic and/or optical components) or other telecommunications network facilities owned bysuch Person to another Person for such other Person’s own network use, but not the right to physical possession and control of suchfacilities, and without regard to whether such agreement should be characterized as a lease or as a conveyance of an ownership interest.“Issuing Bank” means Credit Agricole CIB, in its capacity as the issuer of Letters of Credit.“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.“LC Exposure” means, at any time, the sum, without duplication, of (i) the aggregate undrawn amount of alloutstanding Letters of Credit at such time plus (ii) the aggregate amount of all LC Disbursements that have not yet been reimbursed byor on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the totalLC Exposure at such time.“LC Termination Date” means the Existing Facility Maturity Date, unless extended pursuant to a Facility Amendmentsigned by the Issuing Bank.191821445.29\C072091\0303228“Latest Maturity Date” shall mean, at any date of determination, the latest maturity date applicable to any Term Loanhereunder at such time, including the latest maturity date of any Existing Term Loan, any Term B Loan, any Incremental Term Loan,or any Refinancing Term Loan, in each case as extended in accordance with this Agreement from time to time.“Lenders” means the Persons listed on Schedule 1.1A and any other Person that shall have become a party heretopursuant to the terms and provisions of Section 10.4, pursuant to an Assignment and Acceptance or pursuant to a Facility Amendment,other than any such Person that ceases to be a party hereto pursuant to the terms and provisions of Section 10.4 pursuant to anAssignment and Acceptance or upon payment in full of such Lender’s Loans and all other sums owing to such Lender under the LoanDocuments (whether or not then due) and the termination of such Lender’s Commitments. Unless the context otherwise requires, theterm “Lenders” includes the Swingline Lender.“Letter of Credit” means (i) any letter of credit (and any successive renewals thereof) issued pursuant to this Agreementand (ii) any Existing Letter of Credit.“LIBO Floor” means 1.00%.“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on theReuters “LIBOR01” screen displaying interest rates for Dollar deposits in the London interbank market (or on any successor orsubstitute page on such screen) at approximately 11:00 a.m., London time two Business Days prior to the commencement of suchInterest Period, as the rate for Dollar deposits in the London interbank market with a maturity comparable to such Interest Period,provided that in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwiseon such screen), the “LIBO Rate” with respect to such Eurodollar Borrowing during such Interest Period shall be determined byreference to such other comparable publicly available service for displaying interest rates applicable to Dollar deposits in the Londoninterbank market as may be selected by the Administrative Agent, provided further that in the absence of such availability, the “LIBORate” shall be determined by reference to the rate at which Dollar deposits of $1,000,000 in immediately available funds for a maturitycomparable to such Interest Period are offered by the principal office of the Administrative Agent to leading banks in the Londoninterbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period,provided further that in the event the principal office of the Administrative Agent is not making such offers, “LIBO Rate” shall meansuch other rate reflecting the Lenders’ cost of funds as determined by the Administrative Agent using any reasonable or prevailingmethod.“Lien” means, with respect to any asset, (i) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,charge or security interest in, on or of such asset, (ii) the interest of a vendor or a lessor under any conditional sale agreement, capitallease or title retention agreement relating to such asset and (iii) in the case of securities, any purchase option, call or similar right of athird party with respect to such securities.“Loan Documents” means this Agreement, the Notes, the documentation in respect of each Letter of Credit, eachFacility Amendment and the Security Documents.201821445.29\C072091\0303228“Loan Parties” means the Borrower, the Parent and the Subsidiary Guarantors.“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.“Majority A Lenders” means, at any time, Lenders having Revolving Commitments under the Existing RevolvingFacility and outstanding Existing Term Loans representing greater than 50% of the sum of the aggregate Revolving Commitmentsunder the Existing Revolving Facility and outstanding Existing Term Loans of all Lenders.“Majority Facility Lenders” means, with respect to (1) the Existing Term Loans, the holders of more than 50% of theaggregate unpaid principal amount of the Existing Term Loans, (1) the Term B Commitments and the Term B Loans, the holders ofmore than 50% of the aggregate unpaid principal amount of the Term B Loans, (1) the Incremental Term Commitments andIncremental Term Loans of the same Class, the holders of more than 50% of the aggregate unpaid principal amount of the IncrementalTerm Loans of such Class, (1) the Revolving Commitments and the Revolving Loans of the same Class, the holders of more than 50%of the aggregate Revolving Commitments of such Class, and (1) any other Class of Term Loans, the holders of more than 50% of theaggregate unpaid principal amount of the Term Loans of such Class.“Margin Stock” has the meaning assigned to such term in Regulation U.“Material Adverse Effect” means a material adverse effect on (i) the business, assets, properties, operations, or financialcondition of the Borrower and the Subsidiaries (other than NMTC Subsidiaries), taken as a whole, or (ii) the rights of, or remediesavailable to, any Credit Party, under the Loan Documents.“Material Obligations” means Indebtedness (other than Indebtedness under the Loan Documents) of any one or more ofthe Parent, the Borrower or any Subsidiary in an aggregate principal amount exceeding $50,000,000. For purposes of determiningMaterial Obligations, the “principal amount” of the obligations of any Person in respect of any Hedging Agreement at any time shall bethe maximum aggregate amount (giving effect to any netting agreements) such Person would be required to pay if such HedgingAgreement were terminated at such time.“Materials” has the meaning assigned to such term in Section 10.1.“Maturity Date” means (1) with respect to the Existing Term Loans, the Existing Facility Maturity Date, (1) withrespect to the Term B Loans, the Term B Maturity Date, (1) with respect to any Class of Incremental Term Loans, the IncrementalTerm Loan Maturity Date applicable to such Class, (1) with respect to the Revolving Commitments under the Existing RevolvingFacility, the Existing Facility Maturity Date, (1) with respect to any Class of Extended Term Loans or Extended RevolvingCommitments, the final maturity date as specified in the applicable Extension Amendment, and (1) with respect to any Class ofRefinancing Term Loans or Refinancing Revolving Commitments, the final maturity date as specified in the applicable RefinancingAmendment.211821445.29\C072091\0303228“Minimum Extension Condition” has the meaning given to such term in Section 2.15(b).“Moody’s” means Moody’s Investors Service, Inc.“Mortgages” means the mortgages, deeds of trust, assignments of leases and rents and other security documents (if any)delivered pursuant to this Agreement with respect to Real Property, each in form and substance reasonably satisfactory to theAdministrative Agent.“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA, and to which theBorrower or an ERISA Affiliate is making, is obligated to make or has made or been obligated to make, contributions on behalf ofparticipants who are or were employed by any of them.“Net Income” means, with respect to any Person for any period, the net income of such Person and its subsidiariesduring such period determined on a consolidated basis in accordance with GAAP (without deduction for minority interests).“Net Proceeds” shall mean (X) with respect to any sale or other disposition of assets or any casualty event orcondemnation, the aggregate amount of cash received by the Borrower or any Subsidiary Guarantor, including, (a) any cash receivedin respect of any non-cash proceeds, but only as and when received, (b) in the case of a casualty, insurance proceeds, and (c) in thecase of a condemnation or similar event, condemnation awards and similar payments, net of (i) amounts reserved, if any, for taxespayable with respect to the transaction, (ii) transaction fees, commissions, discounts, costs and out-of-pocket expenses properlyattributable to the transaction, (iii) the principal amount of any Indebtedness (other than the Loans) that is secured by assets subject tothe transaction and that is repaid in connection therewith, and (iv) any reserve for adjustments in respect to the transaction establishedin accordance with GAAP, and (Y) in connection with any incurrence of Indebtedness, the cash proceeds received from suchincurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and othercustomary fees and expenses actually incurred in connection therewith.“New Excluded Subsidiary” has the meaning assigned to such term in Section 6.11.“New Included Subsidiary” has the meaning assigned to such term in Section 6.11.“New Subsidiary” has the meaning assigned to such term in Section 6.11.“NMTC Subsidiaries” means Terra GCI Investment Fund, LLC, a Missouri limited liability company, Terra GCI 2Investment Fund, LLC, a Missouri limited liability company, Terra GCI 2-USB Investment Fund, LLC, a Missouri limited liabilitycompany, Terra GCI 3 Investment Fund, LLC, a Missouri limited liability company, each investment fund that becomes a Subsidiaryafter the Third Restatement Closing Date in connection with a Permitted NMTC Transaction, and each subsidiary of each of theforegoing that is a Subsidiary.221821445.29\C072091\0303228“Non-Consenting Lender” has the meaning assigned to such term in Section 10.2(c).“Non-Financial Covenant Facility” means (a) the Term B Loans, and (b) any Loan or Commitment under any otherFacility that, pursuant to its Facility Amendment, does not contain the Financial Covenants, provided that any such Facility (includingthe Term B Loans) that is amended to contain the Financial Covenants shall cease to be a Non-Financial Covenant Facility on the datethat such amendment becomes effective and such Facility becomes subject to the Financial Covenants.“Non‑Financial Covenant Lender” means a Lender with a Commitment, or that holds a Loan, under a Non‑FinancialCovenant Facility.“Non-US Lender” has the meaning assigned to such term in Section 3.7(f).“Notes” means, to the extent issued pursuant to Section 2.8(d), promissory notes evidencing the Loans substantially inthe form of (1) Exhibit B-1, in the case of any Revolving Loan, (1) Exhibit B-2, in the case of any Existing Term Loan, (1) Exhibit B-3, in the case of any Swingline Loan, (1) Exhibit B-4 in the case of any Term B Loan, or (1) the appropriate exhibit attached to therelevant Facility Amendment.“Obligations” has the meaning assigned to such term in the Security Agreement.“OFAC” means the Office of Foreign Assets Control of the U.S. Department of Treasury.“One Month LIBO Rate” means as of any date, the rate appearing on the Reuters “LIBOR01” screen displayinginterest rates for Dollar deposits in the London interbank market (or on any successor or substitute page on such screen) atapproximately 11:00 a.m., London time two Business Days prior to such date, as the rate for one month Dollar deposits in the Londoninterbank market, provided that in the event such rate does not appear on such screen (or on any successor or substitute page on suchscreen or otherwise on such screen), the “One Month LIBO Rate” shall be determined by reference to such other comparable publiclyavailable service for displaying one month interest rates applicable to Dollar deposits in the London interbank market as may beselected by the Administrative Agent, provided further that in the absence of such availability, the “One Month LIBO Rate” shall bedetermined by reference to the rate at which one month Dollar deposits of $1,000,000 in immediately available funds are offered by theprincipal office of the Administrative Agent to leading banks in the London interbank market at approximately 11:00 a.m., Londontime, two Business Days prior to such date, provided further that in the event the principal office of the Administrative Agent is notmaking such offers, “One Month LIBO Rate” shall mean such other rate reflecting the Lenders’ cost of funds as reasonablydetermined by the Administrative Agent using any reasonable or prevailing method.“Operating Cash Flow” means, for any Person for any period, (a) Net Income of such Person for such period, plus (b)without duplication and to the extent deducted in determining such Net Income, the sum of (i) Interest Expense for such period, (ii)provision for income taxes231821445.29\C072091\0303228for such period, (iii) the aggregate amount attributable to depreciation and amortization for such period, (iv) the aggregate amount ofother non‑cash charges for such period, (v) the aggregate amount of all non-cash compensation paid to directors, officers andemployees, and (vi) the aggregate amount of extraordinary or non-recurring charges during such period, minus (c) without duplicationand to the extent added in determining such Net Income, the aggregate amount of extraordinary, non-operating and non-recurringadditions to income during such period (including IRUs that do not provide for periodic payments to be made at least semi-annuallyduring the term of such transaction in proportion to the availability of capacity).“Other Refinancing Condition” means, in connection with any issuance of Other Replacement Debt in respect of any ofthe Senior Notes, the following condition shall be required to be satisfied substantially simultaneously with the incurrence of suchOther Replacement Debt: such Senior Notes shall have been (a) paid in full, (b) defeased in accordance with the terms of the indenturefor such Senior Notes, (c) called for redemption in accordance with the indenture for such Senior Notes and an amount (in the formrequired, if any) as shall be sufficient to pay the entire principal of, premium, if any, and interest on such Senior Notes on theapplicable redemption date (the “Segregated Funds”) shall have been (i) irrevocably deposited with the trustee for such Senior Notes,in trust, for the benefit of the holders of the Senior Notes, (ii) irrevocably deposited into an escrow with the Administrative Agent or itsdesignee, such escrow to be on terms and conditions reasonably satisfactory to the Administrative Agent, such escrowed amounts to beused only for the purpose of paying the principal of, premium, if any, and interest on such Senior Notes on the applicable redemptiondate, or (iii) any combination of clauses (i) and (ii) immediately above, or (d) any combination of clauses (a), (b) or (c) immediatelyabove.“Other Refinancing Indebtedness” means, with respect to any Indebtedness, any other Indebtedness that renews,refinances or replaces such Indebtedness; provided that (1) the only obligors under such renewal, refinancing or replacementIndebtedness are Persons that were obligors under the Indebtedness being renewed, refinanced or replaced, (2) if the Indebtednessbeing renewed, refinanced or replaced is subordinated in right of payment to the Obligations, such renewal, refinancing or replacementIndebtedness shall be subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as thosecontained in the documentation governing the Indebtedness being renewed, refinanced or replaced, (3) such renewal, refinancing orreplacement shall not increase the principal amount of such Indebtedness (other than with respect to any accrued interest, premiums,fees or expenses payable in connection with such renewal, refinancing or replacement, and any original issue discount in connectiontherewith, provided that the aggregate sum of all such accrued interest, premiums, fees, expenses and original issue discount shall notexceed in the aggregate an amount equal to 10% of the Indebtedness being renewed, refinanced or replaced), (4) such renewal,refinancing or replacement Indebtedness has a final stated maturity date equal to or later than the final stated maturity date of theIndebtedness being renewed, refinanced or replaced and (5) such renewal, refinancing or replacement Indebtedness has a WeightedAverage Life to Maturity equal to or longer than the Weighted Average Life to Maturity of the Indebtedness being renewed,refinanced or replaced.“Other Replacement Debt” means senior unsecured debt of the Parent that meets the following criteria: (i) such debtconstitutes Other Refinancing Indebtedness, (ii) such debt does not241821445.29\C072091\0303228require any payment or prepayment (including without limitation any sinking fund or similar payment) of principal prior to thePermitted Debt Maturity Date other than pursuant to mandatory prepayment requirements not materially more restrictive than thoseapplicable to the Senior Notes, with such changes thereto as shall be reasonably acceptable to the Administrative Agent, and (iii) theaffirmative covenants, negative covenants and events of default applicable thereto shall not be materially more restrictive in substance,when taken as a whole, than those applicable to the Indebtedness being refinanced, unless reasonably acceptable to the AdministrativeAgent.“Other Taxes” means any and all current or future stamp or documentary Taxes or any other excise or property Taxes,charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwisewith respect to, the Loan Documents.“Parent” means GCI, Inc., an Alaska Corporation.“Participant” has the meaning assigned to such term in Section 10.4(d).“Patriot Act” has the meaning assigned to such term in Section 10.13.“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entityperforming similar functions.“Permitted Cash” means, as of any date, cash and Cash Equivalents of the Borrower and the Subsidiary Guarantors tothe extent (1) not in excess of $50,000,000, and (1) subject to no Lien other than Permitted Encumbrances within the meaning ofclauses (a), (e) and/or (i) of such defined term and/or any Lien permitted pursuant to Section 7.2(a).“Permitted Debt Maturity Date” means the date that is 180 days after the Latest Maturity Date.“Permitted Encumbrances” means:(a) Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 6.4;(b) landlords’, vendors’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liensimposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 60 days or arebeing contested in compliance with Section 6.4;(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation,unemployment insurance and other social security laws or regulations;(d) pledges and deposits to secure the performance of bids, government, trade and other similar contracts (other thancontracts for the payment of money), leases, subleases, statutory obligations and surety, stay, appeal, indemnity, performance or othersimilar bonds or obligations and other obligations of a like nature, and deposits or pledges in lieu of such bonds or251821445.29\C072091\0303228obligations, or to secure such bonds or obligations, or to secure letters of credit in lieu of or supporting the payment of such bonds orobligations, in each case in the ordinary course of business;(e) judgment and attachment liens in respect of judgments that do not constitute an Event of Default under clause (k)of Article 8;(f) easements, zoning restrictions, rights-of-way and similar encumbrances on, and other imperfections of title withrespect to, real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations anddo not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of theBorrower and the Subsidiaries;(g) Liens on the assets of any Subsidiary Guarantor in favor of the Borrower or any other Subsidiary Guarantor,Liens on assets of the Borrower in favor of any Subsidiary Guarantor, and Liens on assets of any Excluded Subsidiary in favor of anyother Excluded Subsidiary;(h) Liens on Margin Stock to the extent that a prohibition on such Liens would violate Regulation U;(i) Liens in favor of collecting or payor banks or securities intermediaries having a right of setoff, revocation, refundor chargeback with respect to money or instruments of the Parent, the Borrower or any Subsidiary on deposit with or in possession ofsuch bank or in a security account of such security intermediary, or arising under or pursuant to general banking conditions;(j) Liens representing any interest or title of a licensor, lessor or sublicensor or sublessor, or a licensee, lessee orsublicensee or sublessee, in the property subject to any lease, license or sublicense or concession agreement permitted by thisAgreement;(k) Liens arising from precautionary Uniform Commercial Code financing statements regarding operating leases;(l) (i) receipt of progress payments and advances from customers in the ordinary course of business to the extent thesame creates a Lien on the related inventory and proceeds thereof and (ii) Liens relating to purchase orders and other agreementsentered into with customers or suppliers of the Borrower or any Subsidiary in the ordinary course of business;(m) Liens solely on any cash earnest money deposits made by the Borrower or any Subsidiary in connection with anInvestment permitted by Section 7.4;(n) Liens deemed to exist in connection with Investments permitted by Section 7.4(a) that constitute repurchaseobligations;(o) (i) deposits securing liability to insurance carriers under insurance or self-insurance arrangements in respect ofsuch obligations and (ii) pledges and deposits securing liability for reimbursement or indemnification obligations of (includingobligations in respect of letters of261821445.29\C072091\0303228credit or bank guarantees for the benefit of) insurance carriers providing property, casualty, liability, director and officer or otherinsurance to the Parent, the Borrower or any Subsidiary;(p) Liens securing obligations (other than obligations representing Indebtedness for money borrowed) underreciprocal easement or similar agreements entered into in the ordinary course of business of the Parent, the Borrower or any Subsidiary;(q) Liens arising out of conditional sale, title retention, consignment or similar arrangements entered into by theParent, the Borrower or any Subsidiary in the ordinary course of business; and(r) statutory Liens on the CoBank Equities in favor of CoBank.“Permitted Holders” means (i) Ronald Duncan and his estate, spouse, ancestors, lineal descendants and the trustee ofany bona fide trust of which the foregoing are the sole beneficiaries and (ii) the General Communication, Inc. Employee StockPurchase Plan.“Permitted NMTC Debt” means Indebtedness incurred pursuant to Section 7.1(h).“Permitted NMTC Transactions” means (a) the New Markets Tax Credit transactions consummated by GCI and itssubsidiaries prior to the Third Restatement Closing Date (the “Existing NMTC Transactions”) and (b) additional New Markets TaxCredit transactions consummated after the Third Restatement Closing Date on terms and conditions substantially similar to thoserelating to the Existing NMTC Transactions (except that all debt owed by the relevant investment funds thereunder shall be payable tothe Borrower or a Subsidiary Guarantor, the Borrower or such Subsidiary Guarantor, as the case may be, may guarantee or indemnifytax indemnification obligations of the project borrower and Excluded Subsidiaries may invest in such transactions) or otherwisereasonably acceptable to the Administrative Agent.“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company,partnership, Governmental Authority or other entity.“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IVof ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, ifsuch plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) ofERISA.“Platform” shall mean Intralinks or another similar electronic system.“Pledge Agreement” means the Second Amended and Restated Pledge Agreement, dated as of the Third RestatementClosing Date, between the Parent and the Administrative Agent, for the benefit of the Secured Parties.“Prime Rate” means the rate of interest per annum publicly announced from time to time by Credit Agricole CIB as itsprime commercial lending rate at its principal office in New York City; each change in the Prime Rate being effective from andincluding the date such change is271821445.29\C072091\0303228publicly announced as being effective. The Prime Rate is not intended to be lowest rate of interest charged by Credit Agricole CIB inconnection with extensions of credit to borrowers.“Proposed Change” has the meaning assigned to such term in Section 10.2(c).“Public Lender” shall have the meaning assigned to such term in Section 10.1.“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding$10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such SwapObligation or such other Loan Party as constitutes an “eligible contract participant” under the Commodity Exchange Act or anyregulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time byentering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.“Real Estate Collateral Requirement” means the requirement that, with respect to each owned Real Property required tobe subject to a Mortgage hereunder, the Administrative Agent shall have received (each in form and substance satisfactory to theAdministrative Agent):(a) a Mortgage duly executed and delivered by the relevant Loan Party that is the record owner of such Real Property,in form for recording in the recording office of the jurisdiction where such Real Property to be encumbered thereby is situated, in favorof the Administrative Agent for the benefit of the Secured Parties (in such number of copies as the Administrative Agent shall haverequested), together with such other instruments as shall be necessary or appropriate (in the reasonable judgment of the AdministrativeAgent) to create a Lien under applicable law, all of which shall be in form and substance reasonably satisfactory to AdministrativeAgent, which Mortgage and other instruments shall be effective to create and/or maintain a Lien on such Real Property, subject to noLiens other than Liens permitted under Section 7.2 applicable to such Real Property;(b) to the extent that Lenders would be required by federal law and regulations regarding flood insurance (including theNational Flood Insurance Reform Act of 1994) to obtain the same in connection with obtaining such Mortgage: (i) a ‘life of loan’ floodhazard determination, and (ii) as applicable, evidence of flood insurance and an acknowledged borrower notice, for such RealProperty;(c) a fully paid policy of title insurance (or marked binding pro forma having the same effect of a title insurance policy)in the form reasonably approved by the Administrative Agent insuring the Lien of the Mortgage encumbering such Real Property as avalid Lien (subject to this clause (c)) on such Real Property and fixtures described therein, which policy of title insurance (or markedbinding pro forma having the same effect of a title insurance policy) shall be in an amount reasonably satisfactory to the AdministrativeAgent and shall (i) be issued by a title insurance company selected by the Borrower and reasonably satisfactory to the AdministrativeAgent, (ii) include such coinsurance and reinsurance arrangements (with provisions for direct access) as shall be reasonably acceptableto the Administrative Agent, (iii) have been supplemented by such endorsements or affirmative insurance, if available, as shall bereasonably requested by the281821445.29\C072091\0303228Administrative Agent, and (iv) contain no exceptions to title other than exceptions for Liens permitted under Section 7.2 and otherexceptions reasonably acceptable to the Administrative Agent;(d) evidence reasonably acceptable to the Administrative Agent of payment by the Borrower of all title insurancepremiums, search and examination charges, mortgage, filing and recording taxes, fees and related charges required for the recording ofsuch Mortgage;(e) if the Administrative Agent or Lenders holding more than 50% of the Total Credit Exposure of all Lenders of allClasses that are beneficiaries of such Real Property Collateral, taken as a whole, reasonably determine that they are required by law orregulation to have appraisals prepared in respect of any such Real Property, the Borrower will cooperate with the Administrative Agentin obtaining appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the FinancialInstitution Reform, Recovery and Enforcement Act of 1989, as amended, or any other law or regulation and which shall otherwise bein form and substance reasonably satisfactory to the Administrative Agent, and the Borrower shall pay all reasonable fees and expensesincurred by the Administrative Agent in connection therewith;(f) all such other documents, instruments or items (including UCC fixture filings) as shall be reasonably necessary in theopinion of the Administrative Agent (or its counsel) to create a valid and perfected mortgage Lien on such Real Property subject onlyto Liens permitted under Section 7.2, including such affidavits and instruments of indemnifications by the Borrower and the relevantSubsidiary as shall be reasonably required to induce such title company to issue the policy or policies (or commitment) andendorsements contemplated in clause (c) above; and(g) customary opinions (addressed to the Administrative Agent and the Lenders) of local counsel for the relevant LoanParty (i) in the state in which such Real Property is located, with respect to the enforceability and perfection of the Mortgage coveringsuch Real Property and any related fixture filings in form and substance reasonably satisfactory to the Administrative Agent and (ii) ifrequested by the Administrative Agent, in the state in which such Loan Party is organized and formed, with respect to, among othermatters, the valid existence, corporate power and authority of such Loan Party in the granting of such Mortgage.“Real Property” means, collectively, all right, title and interest of the Borrower or any Subsidiary in and to any and allparcels of real property owned by the Borrower or any Subsidiary together with all improvements and appurtenant fixtures, easementsand other property and rights incidental to the ownership, lease or operation thereof.“Refinanced Debt” has the meaning set forth in the defined term Credit Agreement Refinancing Debt.“Refinancing Amendment” shall mean an amendment to this Agreement executed by each of (a) the Borrower, (b) theAdministrative Agent, and (c) each Additional Refinancing Lender thereunder.“Refinancing Revolving Commitments” shall mean one or more Classes of revolving credit commitments hereunderthat result from a Refinancing Amendment.291821445.29\C072091\0303228“Refinancing Revolving Loans” shall mean one or more revolving loans hereunder that result from a RefinancingAmendment.“Refinancing Series” shall mean all Refinancing Revolving Commitments, Refinancing Term Loans or RefinancingTerm Commitments that are established pursuant to the same Refinancing Amendment (or any subsequent Refinancing Amendment tothe extent such Refinancing Amendment expressly provides that the Refinancing Revolving Commitments, Refinancing Term Loansor Refinancing Term Commitments provided for therein are intended to be a part of any previously established Refinancing Series) andthat provide for the same effective yield and amortization schedule.“Refinancing Term Commitments” shall mean one or more term loan commitments hereunder that fund RefinancingTerm Loans of the same Class pursuant to a Refinancing Amendment.“Refinancing Term Loans” shall mean one or more term loans hereunder that result from a Refinancing Amendment.“Register” has the meaning assigned to such term in Section 10.4(c).“Regulation T” means Regulation T of the Board as from time to time in effect and all official rulings andinterpretations thereunder or thereof.“Regulation U” means Regulation U of the Board as from time to time in effect and all official rulings andinterpretations thereunder or thereof.“Regulation X” means Regulation X of the Board as from time to time in effect and all official rulings andinterpretations thereunder or thereof.“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors,officers, employees, agents, trustees and advisors of such Person and such Person’s Affiliates.“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing greater than 50% of thesum of the aggregate Total Credit Exposures of all Lenders. Notwithstanding anything to the contrary herein contained, each Non-Financial Covenant Lender, solely in its capacity as a Non-Financial Covenant Lender, with respect to any matter requiring the vote ofLenders pursuant to the exercise of any remedy under the last paragraph of Article 8 arising from an Event of Default under anyFinancial Covenant, shall, automatically and without further action on the part of such Non‑Financial Covenant Lender, the Borroweror the Administrative Agent, be deemed to have voted its Total Credit Exposure (other than its Financial Covenant Credit Exposure),and each such Non-Financial Covenant Lender irrevocably instructs the Borrower, each other Lender and the Administrative Agent totreat as voted, in the same proportion as the allocation of voting with respect to such matter by Financial Covenant Lenders (other thanin their capacity as Non‑Financial Covenant Lenders) so long as such Non‑Financial Covenant Lender is treated in connection with theexercise of such right or taking of such action on the same basis as, and in a301821445.29\C072091\0303228manner no less favorable to such Non‑Financial Covenant Lender than, the Financial Covenant Lenders.“Required Revolving Lenders” means, at any time, Lenders having Total Revolving Credit Exposures representinggreater than 50% of the sum of the aggregate Total Revolving Credit Exposures of all Lenders.“Responsible Officer” means, with respect to any Person, any of the chief executive officer, president, chief financialofficer (or similar title) or treasurer (or similar title) of such Person.“Restricted Payment” means, as to any Person, (i) any dividend or other distribution by such Person (whether in cash,securities or other property) with respect to any Equity Interest issued by such Person, (ii) any payment (whether in cash, securities orother property), including any sinking fund or similar deposit, by such Person on account of the purchase, redemption, retirement,acquisition, cancellation or termination of any such Equity Interest or any option, warrant or other right to acquire any such EquityInterest, (iii) any payment of any management, consulting, administrative or other similar fee by such Person to any Affiliate thereof tothe extent that such fee is in excess of the amount that such Person could have obtained for similar service on an “arm’s length” basisfrom an unrelated third party, and (iv) any payment of principal or interest or any purchase, redemption, retirement, acquisition ordefeasance of or with respect to any Indebtedness of any Affiliate of such Person.“Revolving Availability Period” means (1) for the Existing Revolving Facility, the period from and including theFourth Restatement Closing Date to but excluding the earlier of the Existing Facility Maturity Date and the date of termination of theRevolving Commitments therefor, and (1) with respect to Refinancing Revolving Loans and Extended Revolving Loans, as set forth inthe applicable Facility Amendment or such earlier date that the Revolving Commitments therefor are terminated.“Revolving Commitment” means, with respect to each Lender having a Revolving Commitment under a Facility, thecommitment of such Lender to make or maintain Revolving Loans and to acquire participations in Letters of Credit and SwinglineLoans thereunder in an aggregate outstanding amount not exceeding the amount of such Lender’s Revolving Commitment as set forth,with respect to the Existing Revolving Facility, on Schedule 1.1A, in the Facility Amendments executed and delivered by suchLender, the Borrower and the Administrative Agent, and in each Assignment and Acceptance pursuant to which such Lender shallhave assumed such Revolving Commitment, as applicable, as such commitment may be reduced or increased from time to timepursuant to Section 2.5, pursuant to assignments by or to such Lender pursuant to Section 10.4 or upon the expiration thereof. Theamount of each Lender’s Revolving Commitment under the Existing Revolving Facility on the Fourth Restatement Closing Date is setforth on such Schedule 1.1A. The aggregate amount of the Revolving Commitments under the Existing Revolving Facility on theFourth Restatement Closing Date is $150,000,000.“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the aggregate outstandingprincipal amount of such Lender’s Revolving Loans plus its LC Exposure and Swingline Exposure at such time.311821445.29\C072091\0303228“Revolving Increase Supplement” means an increase supplement in substantially the form of Exhibit J.“Revolving Lender” means a Lender with a Revolving Commitment.“Revolving Loan” means (1) an Existing Revolving Loan, and (1) a Loan referred to in Section 2.1(a) and madepursuant to Section 2.4.“S&P” means Standard & Poor’s Financial Services, LLC.“Sanctioned Country” means, at any time, a country or territory which is itself the subject or target of any Sanctions(including, at the time of this Agreement, Cuba, Iran, North Korea, Sudan and Syria).“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Personsmaintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union or any EU memberstate, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any suchPerson or Persons.“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time totime by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United NationsSecurity Council, the European Union or Her Majesty’s Treasury of the United Kingdom.“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of itsprincipal functions.“Secured Parties” means the “Secured Parties” as defined in the Security Agreement.“Security Agreement” means the Second Amended and Restated Security Agreement, dated as of the ThirdRestatement Closing Date, among the Borrower, the Subsidiary Guarantors and the Administrative Agent, for the benefit of theSecured Parties.“Security Documents” means (a) the Security Agreement, (b) the Pledge Agreement, and (c) each other securityagreement, instrument or other document executed or delivered pursuant to this Agreement or any agreement referred to in clauses (a)or (b) above to secure any of the Obligations.“Segregated Funds” has the meaning set forth in the defined term Other Refinancing Condition.“Senior Debt” means, as of any date, (1) the aggregate principal amount of all Indebtedness of the Borrower and theSubsidiaries that would be reflected as liabilities on a consolidated balance sheet of the Borrower and the Subsidiaries as of such dateprepared in accordance with GAAP, minus (1) Permitted NMTC Debt to the extent included therein, minus (1) Permitted Cash.321821445.29\C072091\0303228“Senior Leverage Ratio” means, as of any date, the ratio of (i) Senior Debt on such date to (ii) Adjusted Operating CashFlow of the Borrower for the most recently completed four fiscal quarters in respect of which a Compliance Certificate has beendelivered in accordance with Section 6.1(c).“Senior Notes” means the 8 5/8% Senior Notes due 2019 of the Parent and the 6 ¾% Senior Notes due 2021 of theParent (the “2021 Senior Notes”).“Significant Transaction” means each of the following, regardless of whether any requirement under Section 6.1(e)with respect thereto shall have been satisfied (other than transactions by NMTC Subsidiaries (and not involving the Parent or any of itssubsidiaries) to the extent not reasonably expected to result in a Material Adverse Effect):(a) any transaction referred to in Section 7.3(a)(i),(b) any transaction referred to in Section 7.3(a)(iii) which is not otherwise permitted by Section 7.3,(c) any Acquisition by the Parent or any of its subsidiaries other than from the Parent or any of its subsidiaries forwhich the aggregate consideration payable by the Parent and its subsidiaries is in excess of $100,000,000,(d) any transaction (i) referred to in Section 7.5(e) which is not otherwise permitted by Section 7.5, and (ii) for whichthe aggregate consideration payable by the Borrower and the Subsidiaries is in excess of $50,000,000, or(e) any sale, transfer, lease or other disposition of assets by the Parent or any of its subsidiaries other than to theParent or any of its subsidiaries for which the aggregate fair market value of the property of the Parent and its subsidiaries subjectthereto is in excess of $100,000,000.“State Law” means any state law pertaining to or regulating intrastate and local telecommunications services, or anysuccessor statute or statutes thereto, and all State Regulations pursuant to such State Law.“State PUC” means any state public utility commission or any other state commission, agency, department board orauthority with responsibility for regulating intrastate and local telecommunications services.“State Regulations” means all rules, regulations, written policies, orders and decisions of any State PUC.“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company,partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’sconsolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as anyother corporation, limited liability company, partnership, association or other entity of which securities or other ownership interestsrepresenting more than 50% of the equity or more than 50%331821445.29\C072091\0303228of the ordinary voting power is or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date,owned, controlled or held by the parent or one or more subsidiaries of the parent.“Subsidiary” means any subsidiary of the Borrower.“Subsidiary Guarantor” means any Subsidiary that is a party to this Agreement and executes and delivers the applicableSecurity Documents.“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement,contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at suchtime. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total principal amount of SwinglineLoans outstanding at such time.“Swingline Interest Period” means, subject to the provisions of Section 2.6(a), with respect to any Swingline Loanrequested by the Borrower, the period commencing on the date of Borrowing with respect to such Swingline Loan and ending not inexcess of ten days thereafter, as selected by the Borrower in its irrevocable Borrowing Request, provided, however, that (i) if anySwingline Interest Period would otherwise end on a day that is not a Business Day, such Swingline Interest Period shall be extended tothe next succeeding Business Day, and (ii) the Borrower shall select Swingline Interest Periods so as not to have more than threedifferent Swingline Interest Periods outstanding at any one time.“Swingline Lender” means Credit Agricole CIB, in its capacity as lender of Swingline Loans hereunder.“Swingline Loan” means a Loan made pursuant to Section 2.10.“Swingline Termination Date” means the Existing Facility Maturity Date, unless extended pursuant to a FacilityAmendment signed by the Swingline Lender.“Syndication Agent” means MUFG Union Bank, N.A. and Suntrust Bank, each in its capacity as a co-syndicationagent hereunder.“Taxes” means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings now orhereafter imposed, levied, collected, withheld or assessed by any Governmental Authority including any interest, additions to, tax orpenalties applicable thereto.“Term B Loan Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make aTerm B Loan on the Fourth Restatement Closing Date in an aggregate outstanding amount not exceeding the amount of such Lender’sTerm B Loan Commitment as set forth on Schedule 1.1A. The amount of each Lender’s Term B Loan Commitment on the Fourth341821445.29\C072091\0303228Restatement Closing Date is set forth on such Schedule 1.1A. The aggregate amount of the Term B Loan Commitment on the FourthRestatement Closing Date is $275,000,000.“Term B Lender” means a Lender with a Term B Loan Commitment or that holds a Term B Loan.“Term B Loan” means a Loan referred to in Section 2.1(f) and made on the Fourth Restatement Closing Date.“Term B Loan Refinancing” means (1) any optional prepayment or refinancing, in whole or in part, of the Term BLoans with the proceeds of any other term loans, including any Incremental Term Loans or new or additional term loans under thisAgreement, whether incurred directly or by way of the conversion of Term B Loans into a new Class of replacement term loans underthis Agreement, having an Effective Yield that is lower than the Effective Yield of the Term B Loans, other than in connection with aPermitted Refinancing Transaction, (b) any amendment to this Agreement that reduces the Effective Yield of the Term B Loans, otherthan in connection with a Permitted Refinancing Transaction, or (c) any mandatory prepayment of Term B Loans made pursuant toSection 2.7(e). For purposes hereof, “Permitted Refinancing Transaction” means a transaction that involves (1) a Change in Control,(1) an initial public offering of securities by the Borrower or the Parent, or (1) an increase to the Revolving Commitments pursuant toSection 2.5(d) or the incurrence of an Incremental Term Loan, in either case in connection with an Acquisition permitted bySection 7.5 or an Acquisition that is not permitted by the terms of this Agreement.“Term B Loan Repricing Transaction” means any Term B Loan Refinancing (1) that occurs prior to the sixth monthanniversary of the Fourth Restatement Closing Date, and (1) the primary purpose of which shall be to lower the Effective Yield of theTerm B Loan. Any determination by the Administrative Agent with respect to whether a Term B Loan Repricing Transaction shallhave occurred shall be conclusive and binding on all Lenders holding Term B Loans.“Term B Maturity Date” means the earlier to occur of (1) the date that is the seventh anniversary of the FourthRestatement Closing Date and (1) if the 2021 Senior Notes are not refinanced or repaid in full prior to the date that is 180 days prior tothe stated maturity date of the 2021 Senior Notes, such date.“Term Loan” means an Existing Term Loan, a Term B Loan, an Incremental Term Loan, a Refinancing Term Loan oran Extended Term Loan.“Third Restatement Closing Date” means April 30, 2013.“Total Credit Exposure” means, with respect to any Lender at any time, the sum of such Lender’s Revolving CreditExposure, unused Commitments and outstanding Term Loans.“Total Debt” means, (1) as of any date, the aggregate principal amount of all Indebtedness of the Parent and itssubsidiaries that would be reflected as liabilities on a consolidated balance sheet of the Parent and its subsidiaries as of such dateprepared in accordance with GAAP,351821445.29\C072091\0303228minus (1) Permitted NMTC Debt to the extent included therein, minus (1) Permitted Cash. Notwithstanding anything to the contrarycontained in this defined term, for any period of 45 consecutive days, the Borrower may elect, upon prior written notice to theAdministrative Agent, to subtract from Total Debt on any date of calculation thereof during such period an amount equal to theprincipal portion of the Segregated Funds that, as of such date of calculation, has not been applied to the repayment of the SeniorNotes.“Total Leverage Ratio” means, as of any date, the ratio of (i) Total Debt as of such date to (ii) Adjusted Operating CashFlow of the Parent for the most recently completed four fiscal quarters in respect of which a Compliance Certificate has been deliveredin accordance with Section 6.1(c).“Total Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of such Lender’s RevolvingCredit Exposure and unused Revolving Commitment.“Towers” means any cellular telephone site owned, leased or operated by any of the Loan Parties where antennae andelectronic communications equipment are placed.“Transactions” means (i) the execution and delivery by each Loan Party of each Loan Document to which it is a partyon the Fourth Restatement Closing Date, (ii) the initial borrowing of the Loans and the issuance of any Letters of Credit on the FourthRestatement Closing Date, (iii) the other transactions contemplated to occur on the Fourth Restatement Closing Date (other than theAWN Transaction), and (iv) the payment of premiums, fees, interest, commissions and expenses in connection with each of theforegoing.“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or onthe Loans comprising such Borrowing, is determined by reference to, in the case of (i) a Borrowing other than a Swingline Borrowing,the LIBO Rate or the Alternate Base Rate or (ii) a Swingline Borrowing, the Alternate Base Rate.“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of yearsobtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinkingfund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the numberof years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the thenoutstanding principal amount of such Indebtedness.“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from suchMultiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.Section 1.2. Classification of Loans and BorrowingsFor purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Term B Loan”) or by Type(e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Term B Loan”). Borrowings may also be classified and referredto by Class (e.g., a361821445.29\C072091\0303228“Term B Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Term B Borrowing”).Section 1.3. Terms GenerallyThe definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever thecontext may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed tohave the same meaning and effect as the word “shall”. Unless the context requires otherwise, (i) any definition of or reference to anyagreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document asfrom time to time amended, supplemented or otherwise modified, (ii) any definition of or reference to any law shall be construed asreferring to such law as from time to time amended and any successor thereto and the rules and regulations promulgated from time totime thereunder, (iii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iv) thewords “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety andnot to any particular provision hereof, (v) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to referto Articles and Sections of, and Exhibits and Schedules to, this Agreement and (vi) the words “asset” and “property” shall be construedto have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities,accounts and contract rights. Any reference to an “applicable Lender” shall mean, in the case of any Class of Borrowings, Lenderswith that particular Class of Loans or Commitments or, in the case of Swingline Loans and Letters of Credit, Revolving Lenders withrespect to the Facility pursuant to which Swingline Loans were made or Letters of Credit Issued.Section 1.4. Accounting Terms; GAAPExcept as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed inaccordance with GAAP, as in effect from time to time, provided that, if the Borrower notifies the Administrative Agent that theBorrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Fourth RestatementClosing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies theBorrower that the Lenders required therefor request an amendment to any provision hereof for such purpose), regardless of whetherany such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted onthe basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall havebeen withdrawn or such provision amended in accordance herewith. Unless the context otherwise requires, any reference to a fiscalperiod shall refer to the relevant fiscal period of the Borrower.371821445.29\C072091\0303228ARTICLE 2 THE CREDITSSection 2.1. Commitments and Loans(a) Revolving Loans. Prior to the Fourth Restatement Closing Date, each Existing Revolving Lender made ExistingRevolving Loans to the Borrower. The outstanding principal amount of the Existing Revolving Loans on the Fourth RestatementClosing Date is $81,489,372.21. Subject to the terms and conditions set forth herein, each Lender having a Revolving Commitmentwith respect to a Facility agrees to make Revolving Loans with respect to such Facility to the Borrower in dollars from time to timeduring the Revolving Availability Period for such Facility in an aggregate principal amount that will not result in such Lender’sRevolving Credit Exposure with respect to such Facility exceeding such Lender’s Revolving Commitment for such Facility. Within theforegoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow RevolvingLoans.(b) Existing Term Loans. Prior to the Fourth Restatement Closing Date, each Existing Term Lender made ExistingTerm Loans to the Borrower. The outstanding principal amount of the Existing Term Loans on the Fourth Restatement Closing Date is$240,000,000. Existing Term Loans repaid or prepaid in whole or in part may not be reborrowed.(c) [Reserved].(d) Add‑on Term Loans. Prior to the Fourth Restatement Closing Date, no Add‑on Term Loans were made.(e) MFN Applicable Margin. If as of any date the interest rate margin then applicable to any ABR Incremental TermLoan (other than an Incremental Term Loan constituting an increase in the Term B Loans or an Incremental Term Loan having termssubstantially identical to the Term B Loans except with respect to currency, pricing (including interest rate margins, rate floors, fees,premiums and funding discounts) and, subject to not maturing prior to the Term B Loans or having a greater rate of amortization thanthe Term B Loans, the maturity and amortization schedule) (the “ABR MFN Margin”) would, without giving effect to thisSection 2.1(e), exceed the Applicable Margin applicable to ABR Revolving Borrowings under the Existing Revolving Facility andABR Existing Term Loan Borrowings by 0.50% or more, then notwithstanding anything to the contrary contained in the defined term“Applicable Margin”, the Applicable Margin for each ABR Revolving Borrowing under the Existing Revolving Facility, each ABRExisting Term Borrowing and each Swingline Loan shall instead be equal to the ABR MFN Margin. If as of any date the interest ratemargin then applicable to any Eurodollar Incremental Term Loan (other than an Incremental Term Loan constituting an increase in theTerm B Loans or an Incremental Term Loan having terms substantially identical to the Term B Loans except with respect to currency,pricing (including interest rate margins, rate floors, fees, premiums and funding discounts) and, subject to not maturing prior to theTerm B Loans or having a greater rate of amortization than the Term B Loans, the maturity and amortization schedule) (the“Eurodollar MFN Margin”) would, without giving effect to this Section 2.1(e), exceed the Applicable Margin applicable to EurodollarRevolving Borrowings under the Existing Revolving Facility and Eurodollar Existing Term Loan381821445.29\C072091\0303228Borrowings by 0.50% or more, then notwithstanding anything to the contrary contained in the defined term “Applicable Margin”, theApplicable Margin for each Eurodollar Revolving Borrowing under the Existing Revolving Facility and each Eurodollar ExistingTerm Loan Borrowing and for any fee payable under Section 3.3(b)(i) shall instead be equal to the Eurodollar MFN Margin.Notwithstanding anything to the contrary herein contained, no amendment, modification or waiver of any provision of thisSection 2.1(e) shall be permitted without the written consent of the Majority A Lenders.(f) Term B Loans. Subject to the terms and conditions set forth herein, each Lender having a Term B LoanCommitment agrees to make Term B Loans to the Borrower in dollars on the Fourth Restatement Closing Date in an aggregateprincipal amount that will not result in such Lender’s Term B Loan exceeding such Lender’s Term B Loan Commitment. If for anyreason the full amount of such Lender’s Term B Loan Commitment is not fully drawn on the Fourth Restatement Closing Date, theundrawn portion thereof shall automatically be terminated. Amounts borrowed under this Section 2.1(f) and repaid or prepaid in wholeor in part may not be reborrowed.(g) Other Term Loans. Subject to the terms and conditions set forth herein, each Incremental Term Lender agrees,severally and not jointly, if such Incremental Term Lender has so committed pursuant to Section 2.13, to make Incremental TermLoans to the Borrower in an aggregate principal amount not to exceed its Incremental Term Commitment and otherwise on the termsand subject to the conditions set forth in the Incremental Term Facility Amendment to which such Lender is a party. Subject to theterms and conditions set forth herein, each Refinancing Term Lender agrees, severally and not jointly, if such Refinancing TermLender has so committed pursuant to Section 2.14, to make Refinancing Term Loans to the Borrower in an aggregate principal amountnot to exceed its Refinancing Term Commitment and otherwise on the terms and subject to the conditions set forth in the RefinancingAmendment to which such Lender is a party. Subject to the terms and conditions set forth herein, each Extending Term Lender agrees,severally and not jointly, if such Extending Term Lender has so committed pursuant to Section 2.15, to make Extended Term Loans tothe Borrower in an aggregate principal amount not to exceed its Commitment with respect thereto and otherwise on the terms andsubject to the conditions set forth in the Extension Amendment to which such Lender is a party. Term Loans which are prepaid orrepaid in whole or in part may not be reborrowed.Section 2.2. Loans and Borrowings(a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans from the same Facilitymade by the Revolving Lenders ratably in accordance with their respective Revolving Commitments under such Facility, and eachTerm Loan shall be made as part of a Borrowing consisting of Term Loans from the same Facility made by the Term Lenders ratablyin accordance with their respective Commitments to make Term Loans under such Facility. The failure of any applicable Lender tomake any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder, provided that theCommitments of the applicable Lenders are several, and no Lender shall be responsible for any other Lender’s failure to make Loansas required.391821445.29\C072091\0303228(b) Subject to Section 3.4, each Borrowing shall be comprised entirely of Loans of the same Class and Type, in eachcase as the Borrower may request in accordance herewith; provided that each Swingline Loan shall be an ABR Loan. Each applicableLender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to makesuch Loan, provided that any exercise of such option shall not (i) affect the obligation of the Borrower to repay such Loan inaccordance with the terms of this Agreement or (ii) increase any cost or expense to the Borrower or impose any additional withholdingrequirement on the Borrower.(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in aminimum amount of $1,000,000 and in integral multiples of $500,000. At the time that each ABR Borrowing is made, suchBorrowing shall be in a minimum amount of $1,000,000 and in integral multiples of $500,000, provided that an ABR RevolvingBorrowing may be in an aggregate amount that is equal to the entire unused balance of the total Revolving Commitments for a Facility,in an aggregate amount that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.9(e) or inan aggregate amount that is required to finance the reimbursement of a Swingline Loan as contemplated by Section 2.10(c), and anABR Term Borrowing may be in an aggregate amount that is equal to the entire unused Commitments to make Term Loans under aFacility. Each Swingline Loan shall be in an amount that is agreed upon by the Borrower, the Administrative Agent and the SwinglineLender. Borrowings of more than one Type may be outstanding at the same time, provided that there shall not at any time be more thana total of 12 Eurodollar Borrowings outstanding.(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect toconvert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date for theLoans comprising such Borrowing.Section 2.3. Requests for Borrowings(a) To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone or e-mail(i) in the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three Business Days before the date of theproposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 2:00 p.m., New York City time, on the date of theproposed Borrowing. Each such telephonic or e-mail borrowing request shall be irrevocable and shall be confirmed by no later than3:00 p.m., New York City time, on the date of such request by hand delivery, e-mail or facsimile to the Administrative Agent of a copyof a written Borrowing Request signed by the Borrower. Each such telephonic or e‑mail borrowing request and written BorrowingRequest shall specify the following information in compliance with Section 2.2:(i) the aggregate amount of the requested Borrowing;(ii) the date of such Borrowing, which shall be a Business Day;(iii) the Facility under which such Borrowing is to be made;401821445.29\C072091\0303228(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;(v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a periodcontemplated by the definition of the term “Interest Period”; and(vi) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply withthe requirements of Section 2.4.(b) If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to haveselected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with thisSection, the Administrative Agent shall advise each applicable Lender of the details thereof and of the amount of such Lender’s Loanto be made as part of the requested Borrowing.Section 2.4. Funding of Borrowings(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer ofimmediately available funds by 4:00 p.m., New York City time, to the account of the Administrative Agent most recently designatedby it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.10. Subject toSection 5.2, the Administrative Agent will make such Loans available to the Borrower by promptly crediting or otherwise transferringthe amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable BorrowingRequest, provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided inSection 2.9(e) shall be remitted by the Administrative Agent to the Issuing Bank. Notwithstanding anything contained in this Section2.4(a), Borrower, Administrative Agent, and the Term B Lenders may agree that the Term B Loans be funded in such other manner assuch parties may agree.(b) Unless the Administrative Agent shall have received notice from a Lender prior to 3:00 p.m., New York City time,on the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of suchBorrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance withSection 2.4(a) or Section 2.9(e) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then theapplicable Lender agrees to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon,for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to theAdministrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent inaccordance with banking industry rules on interbank compensation. If such Lender pays such amount to the Administrative Agent,then such amount shall constitute such Lender’s Loan included in such Borrowing. If such Lender’s share of such Borrowing is notmade available to the Administrative Agent by such Lender within three Business Days after the date of such Borrowing, the411821445.29\C072091\0303228Administrative Agent shall give notice of such fact to the Borrower and the Administrative Agent shall also be entitled to recover suchamount with interest thereon at the rate per annum otherwise applicable to such Borrowing, on demand, from the Borrower. Nothingherein shall be deemed to limit the rights of the Administrative Agent or the Borrower against any Defaulting Lender.Section 2.5. Termination, Reduction and Increase of Commitments(a) Unless previously terminated, (1)the Revolving Commitments under the Existing Revolving Facility shall terminateon the Existing Facility Maturity Date, and the Term B Loan Commitments shall terminate after the making of the Term B Loans onthe Fourth Restatement Closing Date, (ii) any Incremental Term Commitments of a Class shall terminate on the making of theIncremental Term Loans of such Class, (iii) any Refinancing Term Commitments of a Class shall terminate on the making of theRefinancing Term Loans of such Class, (iv) each Class of Refinancing Revolving Commitments shall terminate on the date specifiedin the Refinancing Amendment for such Class, (v) each Class of Extended Revolving Commitments shall terminate on the datespecified in the Extension Amendment for such Class, and (vi) any Commitments for Extended Term Loans of a Class shall terminateon the making of the Extended Term Loans of such Class.(b) The Borrower may at any time terminate, or from time to time reduce, the Revolving Commitments under aFacility, provided that (i) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to anyconcurrent prepayment of the Revolving Loans under such Facility in accordance with Section 2.7, the sum of the Revolving CreditExposures for such Facility would exceed the total Revolving Commitments for such Facility, and (ii) each such reduction of theRevolving Commitments shall be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000.(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce RevolvingCommitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination orreduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agentshall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable,provided that a notice of termination of Revolving Commitments delivered by the Borrower may state that such notice is conditionedupon the occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in whichcase such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) ifsuch condition is not satisfied. Each reduction, and any termination, of Revolving Commitments shall be permanent, and each suchreduction shall be made ratably among the applicable Lenders (other than a Defaulting Lender) in accordance with their respectiveapplicable Revolving Commitments.(d) The Borrower may at any time and from time to time, at its sole cost, expense and effort, request any one or moreof the Lenders (other than a Defaulting Lender), an Affiliate of a Lender (other than a Defaulting Lender) or an Approved Fund of aLender (other than a Defaulting Lender) to increase its Revolving Commitment or to provide a new Revolving Commitment, as thecase may be (the decision to be within the sole and absolute discretion of such Lender, Affiliate or421821445.29\C072091\0303228Approved Fund) under a Facility, or any other Person reasonably satisfactory to the Administrative Agent, the Issuing Bank and theSwingline Lender to provide a new Revolving Commitment, by submitting a Revolving Increase Supplement duly executed by theBorrower and each such Lender, Affiliate, Approved Fund or other Person, as the case may be, to the Administrative Agent. If suchRevolving Increase Supplement is in all respects reasonably satisfactory to the Administrative Agent, the Administrative Agent shallexecute such Revolving Increase Supplement and deliver a copy thereof to the Borrower and each such Lender, Affiliate, ApprovedFund or other Person, as the case may be. Upon execution and delivery of such Revolving Increase Supplement by the AdministrativeAgent, (i) in the case of each such Lender, such Lender’s Revolving Commitment under such Facility shall be increased to the amountset forth in such Revolving Increase Supplement, (ii) in the case of each such Affiliate, Approved Fund or other Person, such Affiliate,Approved Fund or other Person shall thereupon become a party hereto and shall for all purposes of the Loan Documents be deemed a“Lender” having a Revolving Commitment under such Facility as set forth in such Revolving Increase Supplement, and (iii) in eachcase, the Revolving Commitment under such Facility of such Lender, Affiliate, Approved Fund or such other Person, as the case maybe, shall be as set forth in the applicable Revolving Increase Supplement; provided, however, that:(A) [Reserved];(B) immediately after giving effect thereto, the sum of the increases to the Revolving Commitmentspursuant to this Section 2.5(d) after the Fourth Restatement Closing Date (the “Aggregate Increased Revolving Amount”) plus theamount of the Incremental Term Loans made to the Borrower shall not exceed the Incremental Amount;(C) [Reserved];(D) each such increase when aggregated with any contemporaneous Incremental Term Loans orIncremental Term Commitments made pursuant to Section 2.13 shall be in an amount not less than $25,000,000 and in an integralmultiple of $1,000,000;(E) if Revolving Loans would be outstanding under the applicable Facility immediately after givingeffect to each such increase, then simultaneously with such increase (1) each such Lender, each such Affiliate, Approved Fund or otherPerson and each other Lender under such Facility shall be deemed to have entered into a master assignment and acceptance agreement,in form and substance substantially similar to Exhibit A, pursuant to which each such other Lender shall have assigned to each suchLender and each such Affiliate, Approved Fund or other Person a portion of its Revolving Loans necessary to reflect proportionatelythe Revolving Commitments as adjusted in accordance with this Section 2.5(d), and (2) in connection with such assignment, each suchLender and each such Affiliate, Approved Fund or other Person shall pay to the Administrative Agent, for the account of the otherLenders, such amount as shall be necessary to appropriately reflect the assignment to it of Revolving Loans, and in connection withsuch master assignment each such other Lender may treat the assignment of Eurodollar Borrowings as a prepayment of suchEurodollar Borrowings for purposes of Section 3.6; and431821445.29\C072091\0303228(F) each such Affiliate, Approved Fund or other Person shall have delivered to the AdministrativeAgent and the Borrower all forms, if any, that are required to be delivered by such Affiliate, Approved Fund or other Person pursuantto Section 3.7.Section 2.6. Repayment of Loans(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of eachapplicable Lender (i) the unpaid principal amount of each Existing Facility Loan (other than each Swingline Loan) on the ExistingFacility Maturity Date, and (ii) the unpaid principal amount of each Swingline Loan on the earliest to occur of the last day of theSwingline Interest Period applicable thereto, the tenth Business Day immediately preceding the Swingline Termination Date, and thedate on which the Swingline Loans shall become due and payable pursuant to the provisions hereof, whether by acceleration orotherwise, provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans thenoutstanding.(b) The unpaid principal amount of each Term B Loan shall be payable (1) in an amount equal to 0.25% of theoriginal principal amount of such Term B Loan on the last Business Day of each March, June, September and December of each year,commencing on the first such date following the first complete calendar quarter following the Fourth Restatement Closing Date, and(1) in full on the Term B Loan Maturity Date.(c) The unpaid principal amount of each Incremental Term Loan, Refinancing Term Loan and Extended Term Loanshall be payable in such amounts and on such dates, if any, as shall be set forth in the applicable Facility Amendment.Section 2.7. Prepayment of Loans(a) The Borrower shall have the right at any time and from time to time to prepay any Revolving Borrowing in wholeor in part, or prepay Existing Term Loans and/or Term B Loans, in whole or in part, subject to the requirements of this Section. TheBorrower shall have the right at any time and from time to time to prepay Incremental Term Loans, Refinancing Term Loans and/orExtended Term Loans of any Class in whole or in part subject to any restrictions set forth in the Facility Amendment applicable to suchClass. Each voluntary or mandatory prepayment of Existing Term Loans under this Section 2.7 shall be applied (i) pro rata amongeach Existing Term Loan then outstanding, and (ii) for each Existing Term Loan, to reduce the remaining installments payable thereonpro rata. Each voluntary or mandatory prepayment of Term B Loans under this Section 2.7 shall be applied (i) pro rata among eachTerm B Loan then outstanding, and (ii) for each Term B Loan, to reduce the remaining installments payable thereon pro rata. Subjectto the provisions of any Facility Amendment, each voluntary and mandatory prepayment of any other Class of Term Loans under thisSection 2.7 shall be applied (i) pro rata among each Term Loan in such Class then outstanding, and (ii) for each such Term Loan, toreduce the remaining installments payable thereon pro rata.(b) In the event of any partial reduction or termination of Revolving Commitments, then (i) at or prior to the date ofsuch reduction or termination, the Administrative441821445.29\C072091\0303228Agent shall notify the Borrower and the applicable Lenders of the sum of the Revolving Credit Exposures under the applicable Facilityafter giving effect thereto and (ii) if such sum would exceed the total Revolving Commitments for such Facility after giving effect tosuch reduction or termination, then the Borrower shall, on the date of such reduction or termination, prepay Revolving Borrowings inan amount sufficient to eliminate such excess. To the extent that the Revolving Borrowings have been prepaid in full and theRevolving Credit Exposure for the applicable Facility still exceeds the Revolving Commitments as a result of the LC Exposure, theBorrower shall cash collateralize, on terms and conditions in accordance with the provisions set forth in Section 2.9(i) of thisAgreement, outstanding Letters of Credit in a principal amount sufficient to eliminate the excess Revolving Credit Exposure.(c) Upon the occurrence of each Amortization Event, and thereafter on each Compliance Certificate Delivery Dateuntil such time, if any, as an Amortization Termination Event shall have occurred, the Borrower shall prepay the Existing Term Loans(subject to Section 2.7(g) below), by an amount equal to the percentage set forth below adjacent to the calendar year in which theCompliance Certificate Reference Date shall have occurred multiplied by the sum of the original principal amount of such ExistingTerm Loan:Calendar YearPercentage20141.250%20151.875%20163.125%20173.750%For purposes of this Section 2.7(c), the following terms have the following meanings:“Amortization Event” means the delivery of the second consecutive Higher‑leverage Compliance Certificate.“Amortization Termination Event” means, at any time following the last Amortization Event, if any, the delivery of thesecond consecutive Lower‑leverage Compliance Certificate.“Higher-leverage Compliance Certificate” means a Compliance Certificate delivered in accordance with Section 6.1(c)indicating that a High Ratio Condition existed at the Compliance Certificate Reference Date for such Compliance Certificate.“Lower-leverage Compliance Certificate” means a Compliance Certificate delivered in accordance with Section 6.1(c)other than a Higher-leverage Compliance Certificate.Notwithstanding anything to the contrary herein contained, no amendment, modification or waiver of any provision of thisSection 2.7(c) which would have the effect of reducing any payment451821445.29\C072091\0303228hereunder shall be permitted without the written consent of the Majority Facility Lenders in respect of the Existing Term Loan Facility.(d) The Borrower shall prepay the Term Loans pro rata in an amount equal to 100% of the Net Proceeds in excess of$25,000,000 in the aggregate during any fiscal year in respect of Affected Sales; provided that, no such prepayment shall be requiredto the extent that such Net Proceeds are used within 12 months of receipt thereof to purchase assets to be used in the business of theBorrower or any of its Subsidiaries. “Affected Sale” means any sale or other disposition of assets (other than cash) or any casualtyevent or condemnation of property of the Borrower or any Subsidiary (other than sales and dispositions to the Borrower or aSubsidiary Guarantor or in the ordinary course of business of the Borrower or such Subsidiary) in each case occurring at any time thatthe Senior Leverage Ratio, as set forth in the Compliance Certificate most recently delivered, is greater than 2.75:1.00.(e) If any Indebtedness shall be incurred by the Parent, the Borrower or any Subsidiary (excluding any Indebtednessincurred in accordance with Section 7.1) an amount equal to 100% of the Net Proceeds thereof shall be applied on the date of suchincurrence as follows: (1) first, to the pro rata prepayment of the Term Loans and (ii) thereafter, to the pro rata prepayment of theRevolving Loans. If any Credit Agreement Refinancing Debt shall be incurred by the Borrower, an amount equal to 100% of the NetProceeds thereof shall be applied on the date of such incurrence to the pro rata prepayment of the Refinanced Debt being refinanced.(f) Upon the occurrence of a Term B Loan Repricing Transaction, the Borrower shall, simultaneously therewith, payto the Administrative Agent, for the ratable account of each Term B Lender, a premium in an amount equal to (X) in the case of aTerm B Loan Repricing Transaction arising out of a Term Loan B Refinancing within the meaning of clause (a) or (c) of such definedterm, 1.0% of the aggregate principal amount of the Term B Loans being prepaid, or (Y) in the case of a Term B Loan RepricingTransaction arising out of a Term Loan B Refinancing within the meaning of clause (b) of such defined term, 1.0% of the aggregateprincipal balance of the Term B Loans outstanding immediately prior thereto.(g) The Borrower shall notify the Administrative Agent (and, in the case of the prepayment of a Swingline Loan, theSwingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of a prepayment of a EurodollarBorrowing, not later than 2:00 p.m., New York City time, three Business Days before the date of prepayment, (ii) in the case ofprepayment of an ABR Borrowing (other than a Swingline Loan), not later than 2:00 p.m., New York City time, on the date ofprepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 3:00 p.m., New York City time, on the date ofprepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowingor portion thereof to be prepaid, provided that, if a notice of prepayment is given in connection with a conditional notice of terminationof Commitments as contemplated by Section 2.5, then such notice of prepayment may be revoked if such notice of termination isrevoked in accordance with Section 2.5. Promptly following receipt of any such notice relating to a Borrowing, the AdministrativeAgent shall advise the applicable Lenders of the contents thereof. Each partial prepayment of any Borrowing under Section 2.7(a) shall(i) with respect to Eurodollar Borrowings,461821445.29\C072091\0303228be in a minimum amount of $1,000,000 and in integral multiples of $100,000, and (ii) with respect to ABR Borrowings, be in aminimum amount of $500,000 and in integral multiples of $100,000. Prepayments shall be accompanied by accrued interest to theextent required by Section 3.1 together with any amounts required by Section 3.6.Section 2.8. Evidence of Debt(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the debt of theBorrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable andpaid to such Lender from time to time hereunder.(b) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan madehereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due andpayable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by theAdministrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.(c) The entries made in the accounts maintained pursuant to paragraphs (a) or (b) of this Section shall be, absentdemonstrable error, prima facie evidence of the existence and amounts of the obligations recorded therein, provided that the failure ofany Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation ofthe Borrower to repay the Loans in accordance with the terms of this Agreement.(d) Any Lender may request that the Loans made by it be evidenced by a Note. In such event, the Borrower shallprepare, execute and deliver to such Lender, a Note payable to such Lender. In addition, if requested by a Lender, its Note may bemade payable to such Lender and its registered assigns in which case all Loans evidenced by such Note and interest thereon shall at alltimes (including after assignment pursuant to Section 10.4) be represented by one or more Notes in like form payable to the payeenamed therein and its registered assigns.Section 2.9. Letters of Credit(a) General. Subject to the terms and conditions set forth herein and in Section 2.12(d), the Borrower may request theissuance of Letters of Credit denominated in dollars for its own account (or for the account of any Subsidiary other than NMTCSubsidiaries), in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to timeduring the period from the Fourth Restatement Closing Date to the third day prior to the LC Termination Date. In the event of anyinconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of creditapplication or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank, the terms andconditions of this Agreement shall control. Upon satisfaction of the conditions in Article 5 on the Fourth Restatement Closing Date, ineach case automatically and without further action on the part of any Person, (i) each Existing Letter of Credit will be deemed to be aLetter of Credit issued hereunder for all purposes of the Loan Documents and (ii) each Lender that has issued an Existing471821445.29\C072091\0303228Letter of Credit shall be deemed to have granted to each other Lender with a Revolving Commitment, and each other such Lendershall be deemed to have acquired from such issuer, a participation in each Existing Letter of Credit equal to such other Lender’sApplicable Percentage of (A) the aggregate amount available to be drawn under such Existing Letter of Credit and (B) the aggregateamount of any reimbursement obligation in respect of any LC Disbursement in respect thereof. With respect to each Existing Letter ofCredit (x) if, prior to the Fourth Restatement Closing Date, the relevant issuer sold a participation therein to a Lender with a RevolvingCommitment, such issuer and Lender agree that such participation shall be automatically canceled upon consummation of the FourthRestatement Closing Date, and (y) if, prior to the Fourth Restatement Closing Date, the relevant issuer sold a participation therein toany bank or financial institution that is not a Lender with a Revolving Commitment, such issuer shall procure the termination of suchparticipation on or prior to the Fourth Restatement Closing Date.(b) Notice of Issuance; Amendment; Renewal; Extension; Certain Conditions. To request the issuance of a Letter ofCredit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or send byfacsimile (or transmit by e‑mail, with attachments thereto, if any, in .pdf format) to the Issuing Bank and the Administrative Agent (notlater than two Business Days before the requested date of issuance, amendment, renewal or extension) a notice requesting the issuanceof a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance,amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shallcomply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof andsuch other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the IssuingBank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any requestfor a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and, upon issuance, amendment,renewal or extension of each Letter of Credit, the Borrower shall be deemed to represent and warrant that), after giving effect to suchissuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $50,000,000 and (ii) the total Revolving CreditExposures shall not exceed the total Revolving Commitments.(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the datethat is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year aftersuch renewal or extension) and (ii) the date that is three days prior to the LC Termination Date, provided that any Letter of Credit mayprovide for the automatic renewal thereof for additional periods of lengths not to exceed one year (which shall in no event extendbeyond the date that is three days prior to the LC Termination Date).(d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amountthereof) and without any further action on the part of the Issuing Bank or the applicable Revolving Lenders, the Issuing Bank herebygrants to each Revolving Lender, and each such Revolving Lender hereby acquires from the Issuing Bank, a participation in suchLetter of Credit equal to such Revolving Lender’s Applicable Percentage of the aggregate amount available to be drawn under suchLetter of Credit. In consideration and in furtherance of481821445.29\C072091\0303228the foregoing, each such Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for theaccount of the Issuing Bank, such Revolving Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank andnot reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement paymentrequired to be refunded to the Borrower for any reason. Each such Revolving Lender acknowledges and agrees that its obligation toacquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affectedby any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence andcontinuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be madewithout any offset, abatement, withholding or reduction whatsoever; provided, however, that no Revolving Lender shall be obligatedto make any payment to the Administrative Agent for any wrongful LC Disbursement made by the Issuing Bank as a result of acts oromissions constituting willful misconduct or gross negligence on the part of the Issuing Bank.(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, then theIssuing Bank shall notify the Borrower to reimburse the Issuing Bank therefor, in which case the Borrower shall reimburse suchLC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement and any accrued interest thereonnot later than 2:00 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrower shall have receivednotice of such LC Disbursement prior to 1:00 p.m., New York City time, on such date, or if such notice has not been received by theBorrower prior to such time on such date, then not later than 2:00 p.m., New York City time, on (A) the Business Day that theBorrower receives such notice, if such notice is received prior to 1:00 p.m., New York City time, on the day of receipt or (B) theBusiness Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time onthe day of receipt, provided that, if the LC Disbursement is equal to or greater than $1,000,000, the Borrower may, subject to theconditions of borrowing set forth herein, request in accordance with Section 2.3 that such payment be financed with an ABRRevolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to makesuch payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower failsto make such payment when due (or if any such reimbursement payment is required to be refunded to the Borrower for any reason),the Issuing Bank may notify the Administrative Agent that the Issuing Bank is requesting that the applicable Lenders make an ABRRevolving Borrowing in an amount equal to such LC Disbursement and any accrued interest thereon, in which case (1) theAdministrative Agent shall notify each applicable Lender of the details thereof and of the amount of such Lender’s Loan to be made aspart of such ABR Revolving Borrowing, and (2) each Lender shall, whether or not any Default shall have occurred and be continuing,any representation or warranty shall be accurate, any condition to the making of any loan hereunder shall have been fulfilled, or anyother matter whatsoever, make the Loan to be made by it under this paragraph by wire transfer of immediately available funds to theaccount of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, (A) on such date, in theevent that such Lender shall have received notice of such ABR Revolving Borrowing prior to 1:00 p.m., New York City time, or (B)if such notice has not been received by such Lender prior to such time on such date, then not later than 2:00 p.m., New York City time,on (x) the Business Day that such Lender491821445.29\C072091\0303228receives such notice, if such notice is received prior to 1:00 p.m., New York City time, on the day of receipt or (y) the Business Dayimmediately following the day that such Lender receives such notice, if such notice is not received prior to such time on the day ofreceipt. Such Loans shall, for all purposes hereof, be deemed to be an ABR Revolving Borrowing referred to in Section 2.1(a) andmade pursuant to Section 2.4, and the Lenders’ obligations to make such Loans shall be absolute and unconditional. TheAdministrative Agent will make such Loans available to the Issuing Bank by promptly crediting or otherwise transferring the amountsso received, in like funds, to the Issuing Bank for the purpose of repaying in full the LC Disbursement and all accrued interest thereon.An ABR Borrowing pursuant to this Section 2.9(e) made when the conditions to an ABR Borrowing are not satisfied underSection 5.2 shall not be deemed to have satisfied the Borrower’s reimbursement obligation with respect to an LC Disbursement forpurposes of determining whether or not an Event of Default exists under clause (a) of Article 8.(f) Obligations Absolute. Except as provided below, to the fullest extent permitted by law, the Borrower’s obligationsto reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shallbe performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i)any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draftor other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement thereinbeing untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft orother document that does not comply with the terms of such Letter of Credit or (iv) any other event or circumstance whatsoever,whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable dischargeof, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither any Credit Party nor any of their respectiveRelated Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter ofCredit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the precedingsentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communicationunder or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation oftechnical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the Issuing Bank shall beliable to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are herebywaived by the Borrower to the extent permitted by applicable law) suffered by the Borrower or any Subsidiary that are caused by theIssuing Bank’s failure to exercise care when determining whether (x) drafts and other documents presented under a Letter of Creditissued by it comply with the terms thereof, or (y) to pay under any Letter of Credit. The parties hereto expressly agree that, in theabsence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competentjurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing andwithout limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be insubstantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and makepayment upon such documents without responsibility for further investigation, regardless of any notice or501821445.29\C072091\0303228information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliancewith the terms of such Letter of Credit.(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documentspurporting to represent a demand for payment under a Letter of Credit issued by it. The Issuing Bank shall promptly notify theAdministrative Agent and the Borrower by telephone (confirmed by facsimile) of such demand for payment and whether the IssuingBank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall notrelieve the Borrower of its obligation to reimburse the Issuing Bank and the applicable Lenders with respect to any suchLC Disbursement.(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimbursesuch LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each dayfrom and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses suchLC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimbursesuch LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 3.1(b) shall apply. Interest accrued pursuant tothis paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lenderpursuant to paragraph (d) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of suchpayment.(i) Cash Collateral. If (x) any Event of Default shall occur and be continuing, on the Business Day that the Borrowerreceives notice from the Administrative Agent or Lenders holding more than 50% of the total LC Exposure demanding the deposit ofcash collateral pursuant to this paragraph, or (y) the maturity of the Revolving Loans has been accelerated, the Borrower shall depositin an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the applicable Lenders, anamount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation todeposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, withoutdemand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in paragraph(h) or (i) of Article 8. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of theobligations of the Borrower under this Section 2.9. The Administrative Agent shall have exclusive dominion and control, including theexclusive right of withdrawal, over such account. Such deposit shall not bear interest, nor shall the Administrative Agent be under anyobligation whatsoever to invest the same, provided, however, that, at the request of the Borrower, such deposit shall be invested by theAdministrative Agent in direct short-term obligations of, or short-term obligations the principal of and interest on which areunconditionally guaranteed by, the United States of America, in each case maturing no later than the expiry date of the Letter of Creditgiving rise to the relevant LC Exposure. Interest or profits, if any, on such investments shall accumulate in such account. Moneys insuch account shall be applied by the Administrative Agent as follows: first, to reimburse the Issuing Bank for LC Disbursements forwhich it has not been reimbursed, second, if there be any excess, to be held for the satisfaction of the reimbursement obligations(contingent or otherwise) of the Borrower for the LC Exposure at such time, third, if there be any excess, to reduce511821445.29\C072091\0303228the Revolving Credit Exposure of all of the Lenders pro rata, and fourth, if there be any excess and if the maturity of the Loans hasbeen accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), tosatisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateralhereunder as a result of the occurrence of an Event of Default, such amount and any interest thereon (to the extent not applied asaforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.Section 2.10. Swingline Loans(a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to theBorrower from time to time in dollars until the Swingline Termination Date, in an aggregate principal amount at any time outstandingthat will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000 or (ii) the sum of thetotal Revolving Credit Exposures exceeding the total Revolving Commitments; provided that the Swingline Lender shall not berequired to make a Swingline Loan to refinance an outstanding Swingline Loan. Notwithstanding the foregoing, the Swingline Lendershall not be required to make a Swingline Loan if (i) any Revolving Lender shall be a Defaulting Lender, or (ii) any Revolving Lendershall have notified the Swingline Lender and the Borrower in writing at least one Business Day prior to the date of Borrowing withrespect to such Swingline Loan that the conditions set forth in Section 5.2 have not been satisfied and such conditions remainunsatisfied as of the requested time of the making of such Swingline Loan. Within the foregoing limits and subject to the terms andconditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone(confirmed by telecopy), not later than 3:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such noticeshall be irrevocable and shall specify (i) the aggregate principal amount to be borrowed, (ii) the requested date of such Borrowing, and(iii) the amount of, and the length of the Swingline Interest Period for, each Swingline Loan, provided, however, that no suchSwingline Interest Period shall end after the Business Day immediately preceding the Swingline Termination Date. The AdministrativeAgent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall makeeach Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the SwinglineLender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.9(e),by remittance to the Issuing Bank) by 3:30 p.m., New York City time, on the requested date of such Swingline Loan.(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 11:00 a.m., NewYork City time, on any Business Day notify the Administrative Agent that the Swingline Lender is requesting that each Lender, andthe Administrative Agent may (with the consent of Lenders holding more than 50% of the total Swingline Exposure) or shall (at therequest of Lenders holding more than 50% of the total Swingline Exposure) by written notice given to the Swingline Lender not laterthan 11:00 a.m., New York City time, on any Business Day521821445.29\C072091\0303228require that each Lender, at the option of the Borrower, (i) make a Revolving Loan in an amount equal to its pro rata RevolvingCommitment with respect to the outstanding principal balance of, and accrued and unpaid interest on, the Swingline Loans, or (ii)acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify theaggregate amount of Swingline Loans in which Lenders will participate. In either such case (i) the Administrative Agent shall notifyeach Lender of the details thereof and of the amount of such Lender’s Revolving Loan or participation interest, as the case may be, and(ii) each Lender shall, whether or not any Default shall have occurred and be continuing, any representation or warranty shall beaccurate, any condition to the making of any Loan hereunder shall have been fulfilled, or any other matter whatsoever, make theRevolving Loan required to be made by it, or purchase the participation required to be purchased by it, under this paragraph by wiretransfer of immediately available funds to the account of the Administrative Agent most recently designated by it for such purpose bynotice to the Lenders, (A) in the event that such Lender receives such notice prior to 12:00 noon, New York City time, on anyBusiness Day, by no later than 3:00 p.m., New York City time, on such Business Day, or (B) in the event that such Lender receivessuch notice at or after 12:00 noon, New York City time, on any Business Day, by no later than 1:00 p.m. New York City time on theimmediately succeeding Business Day. Any Loans made pursuant to this paragraph (c) shall, for all purposes hereof, be deemed to beRevolving Loans referred to in Section 2.1 and made pursuant to Section 2.4(a), and the Lenders’ obligations to make such Loans shallbe absolute and unconditional. The Administrative Agent will make such Loans, or the amount of such participations, as the case maybe, available to the Swingline Lender by promptly crediting or otherwise transferring the amounts so received, in like funds, to theSwingline Lender. Each Lender shall also be liable for an amount equal to the product of its pro rata Revolving Commitment and anyamounts paid by the Borrower pursuant to this Section 2.10 that are subsequently rescinded or avoided, or must otherwise be restoredor returned. Such liabilities shall be absolute and unconditional and without regard to the occurrence of any Default or the complianceby the Borrower with any of its obligations under the Loan Documents. Whenever the Administrative Agent is reimbursed by theBorrower, for the account of the Swingline Lender, for any payment in connection with Swingline Loans and such payment relates toan amount previously paid by a Lender pursuant to this Section, the Administrative Agent will promptly pay over such payment tosuch Lender. The purchase of participations in a Swingline Loan or the making by the Lenders of a Revolving Loan pursuant to thisparagraph shall not relieve the Borrower of any default in the payment thereof.Section 2.11. Payments Generally; Pro Rata Treatment; Sharing of Setoffs(a) Each Loan Party shall make each payment required to be made by it hereunder or under any other Loan Document(whether of principal of Loans, LC Disbursements, interest or fees, or of amounts payable under Sections 3.5, 3.6, 3.7 or 10.3, orotherwise) prior to 2:00 p.m., New York City time (or, in the case of Swingline Loans, 3:00 p.m., New York City time), on the datewhen due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, inthe discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes ofcalculating interest thereon. All such payments shall be made to the Administrative Agent at its office at 1301 Avenue of the Americas,New York, New York, or such other office as to which the Administrative Agent may notify the other parties hereto, except paymentsto be made to the Issuing Bank or the Swingline531821445.29\C072091\0303228Lender as expressly provided herein and except that payments pursuant to Sections 3.5, 3.6, 3.7 and 10.3 shall be made directly to thePersons entitled thereto and payments made pursuant to other Loan Documents shall be made to the Persons specified therein. TheAdministrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipientpromptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for paymentshall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall bepayable for the period of such extension. All payments hereunder shall be made in dollars.(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amountsof principal of Loans, unreimbursed LC Disbursements, interest, fees and commissions then due hereunder (after giving effect to allapplicable grace periods and/or cure periods, if any), such funds shall be applied (i) first, towards payment of interest, fees andcommissions then due hereunder ratably among the parties entitled thereto in accordance with the amounts of interest, fees andcommissions then due to such parties and (ii) second, towards payment of principal of Loans and unreimbursed LC Disbursementsthen due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal of Loans and unreimbursedLC Disbursements then due to such parties.(c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of anyprincipal of, or interest on, any of its Loans or participations in LC Disbursements or Swingline Loans resulting in such Lenderreceiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and SwinglineLoans and accrued interest thereon than the proportion received by any other applicable Lender, then the applicable Lender receivingsuch greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements andSwingline Loans of other applicable Lenders to the extent necessary so that the benefit of all such payments shall be shared by theapplicable Lenders ratably in accordance with the aggregate amount of principal of, and accrued interest on, their respective Loans andparticipations in LC Disbursements and Swingline Loans, provided that (i) if any such participations are purchased and all or anyportion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to theextent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment madeby the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender asconsideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assigneeor participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shallapply). Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that anyLender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff andcounterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount ofsuch participation.(d) Unless the Administrative Agent shall have received notice from a Loan Party prior to the date on which anypayment is due to the Administrative Agent for the account of the applicable Credit Parties hereunder that such Loan Party will notmake such payment, the541821445.29\C072091\0303228Administrative Agent may assume that such Loan Party has made such payment on such date in accordance herewith and may, inreliance upon such assumption, distribute to such Credit Parties the amount due. In such event, if such Loan Party has not in fact madesuch payment, then each such Credit Party severally agrees to repay to the Administrative Agent forthwith on demand the amount sodistributed to such Credit Party with interest thereon, for each day from and including the date such amount is distributed to it to butexcluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined bythe Administrative Agent in accordance with banking industry rules on interbank compensation.(e) If any Credit Party shall fail to make any payment required to be made by it pursuant to Section 2.4(b) or 2.9(e),then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafterreceived by the Administrative Agent for the account of such Credit Party to satisfy such Credit Party’s obligations under suchSections until all such unsatisfied obligations are fully paid.(f) Notwithstanding anything to the contrary herein contained, no amendment, modification or waiver of any provisionof Sections 2.11(b) or 2.11(c) shall be permitted without the written consent of the Majority Facility Lenders in respect of each Facilityadversely affected thereby.Section 2.12. Defaulting LendersNotwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then thefollowing provisions shall apply for so long as such Lender is a Defaulting Lender:(a) fees shall cease to accrue on the unfunded portion of any Revolving Commitment of such Defaulting Lenderpursuant to Section 3.3(a);(b) the Commitments and Total Credit Exposure of such Defaulting Lender shall not be included in determiningwhether all Lenders, the Required Lenders, the Majority Facility Lenders, the Majority A Lenders, or any other group of Lenders havetaken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 10.2); provided that (i)any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such DefaultingLender differently than other affected Lenders shall require the consent of such Defaulting Lender, and (ii) any waiver, amendment ormodification that would increase the Commitments of such Lender, or postpone the final maturity date of any payment of principalowed to such Lender, shall require the consent of such Defaulting Lender;(c) if any Swingline Exposure or LC Exposure exists at the time a Revolving Lender becomes a Defaulting Lenderthen:(i) all of such Swingline Exposure and LC Exposure shall be reallocated among the non‑Defaulting Lenders inaccordance with their respective Applicable Percentages to the extent (A) immediately after giving effectthereto, the sum of all non‑Defaulting Lenders’ Revolving Credit Exposure551821445.29\C072091\0303228would not exceed the total of all non‑Defaulting Lenders’ Revolving Commitments and (B) the conditions setforth in Section 5.2 are satisfied at such time (for the avoidance of doubt, no Lender’s Revolving Commitmentshall be changed as a result of such reallocation);(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, within oneBusiness Day following notice by the Administrative Agent, the Borrower shall, after giving effect to anypartial reallocation pursuant to clause (i) above, (A) first, prepay such Swingline Exposure and (B) second, cashcollateralize such Defaulting Lender’s LC Exposure in accordance with the procedures set forth inSection 2.9(i) for so long as such LC Exposure is outstanding;(iii) to the extent the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposurepursuant to this Section 2.12(c), the Borrower shall not be required to pay any fees for the account of suchDefaulting Lender pursuant to Section 3.3(b) with respect to such Defaulting Lender’s LC Exposure during theperiod such Defaulting Lender’s LC Exposure is cash collateralized;(iv) if the LC Exposure of such non‑Defaulting Lender is reallocated pursuant to this Section 2.12(c), then thefees payable to the Lenders pursuant to Section 3.3(b) shall be adjusted in accordance with such non‑DefaultingLenders’ Applicable Percentages; and(v) the Administrative Agent shall promptly notify the Lenders of any reallocation described in thisSection 2.12(c);(d) so long as any Revolving Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund anySwingline Loan and the Issuing Bank shall not be required to issue, amend, extend or increase any Letter of Credit, unless it is satisfiedthat the related exposure will be 100% covered by the Revolving Commitments of the non‑Defaulting Lenders and/or cash collateralwill be provided by the Borrower in accordance with Section 2.12(c), and participating interests in any such newly issued or increasedLetter of Credit or newly made Swingline Loan shall be allocated among non‑Defaulting Lenders in a manner consistent withSection 2.12(c)(i) (and Defaulting Lenders shall not participate therein); and(e) any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees orotherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Section 2.11(c) butexcluding Section 3.9) shall, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in asegregated account and, subject to any applicable requirements of law, be applied at such time or times as may be reasonablydetermined by the Administrative Agent (1) first, to the payment of any amounts then owing by such Defaulting Lender to theAdministrative Agent hereunder, (1) second, pro rata, to the payment of any amounts then owing by such Defaulting Lender to theIssuing Bank or Swingline Lender hereunder, (1) third, to the extent requested by the Issuing Bank or Swingline561821445.29\C072091\0303228Lender, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any existing orfuture participating interest in any Swingline Loan or Letter of Credit, (1) fourth, to the funding of any Loan in respect of which suchDefaulting Lender has failed to fund its portion thereof as required by this Agreement, (1) fifth, if so determined by the AdministrativeAgent and the Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect ofany Loans under this Agreement, (1) sixth, to the payment of any amounts owing to the Lenders or the Issuing Bank or SwinglineLender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, Issuing Bank or Swingline Lenderagainst such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, (1) seventh, tothe payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by theBorrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, and(1) eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is (x)a prepayment of the principal amount of any Loans or reimbursement obligations in respect of LC Disbursements in respect of which aDefaulting Lender has funded its participation obligations and (y) made at a time when the conditions set forth in Section 5.2 aresatisfied, such payment shall be applied solely to prepay the Loans of, and reimbursement obligations owed to, all non‑DefaultingLenders pro rata prior to being applied to the prepayment of any Loans, or reimbursement obligations owed to, any Defaulting Lender.Section 2.13. Incremental Term Facilities(a) At any time and from time to time, subject to the terms and conditions set forth herein, the Borrower may, by noticeto the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy thereof to each Lender), request toadd one or more additional tranches of term loans (all such additional tranches of term loans, the “Incremental Term Loans”; and allsuch incremental facilities therefor, the “Incremental Term Facilities”); provided that (X) the sum of the aggregate principal amount ofall Incremental Term Loans (determined at the time of incurrence) plus the Aggregate Increased Revolving Amount shall not exceedthe Incremental Amount, and (Y) at the time of each such request and upon the effectiveness of each Incremental Term FacilityAmendment, (1) no Event of Default (or, solely in connection with Acquisitions permitted by Section 7.5 and Investments permittedby Section 7.4 and provided that the applicable Incremental Term Lenders have agreed thereto, no Event of Default under Sections8.1(a), (b), (h) or (i)) has occurred and is continuing or would exist after giving effect thereto, (1) the Borrower shall be in pro formacompliance with the Financial Covenants (as of the most recently ended fiscal quarter for which financial statements have beendelivered pursuant to Section 6.1) after giving effect to the incurrence of such Incremental Term Facility and all transactionsconsummated in connection therewith, and (1) the representations and warranties of the Loan Parties set forth in the Loan Documentsshall be true and correct in all material respects on and as of the date of the making of the Incremental Term Loans pursuant to suchIncremental Term Facility Amendment (except to the extent that such representations and warranties relate to an earlier date, in whichcase such representations and warranties shall be true and correct in all material respects as of such earlier date and that anyrepresentation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respectswithout further qualification); provided that, customary “Sungard” or “certain funds” conditionality shall, to the extent agreed by such571821445.29\C072091\0303228Incremental Lenders, apply to any Incremental Term Facilities entered into in order to finance Acquisitions permitted by Section 7.5 orInvestments permitted by Section 7.4.(b) Each Incremental Term Facility shall not be guaranteed by any Subsidiary of the Borrower that is not a Guarantorand will rank pari passu or junior in right of payment and of security (if any) with the other Loans and Commitments.(c) Any Incremental Term Loans (1) for purposes of prepayments, shall be treated substantially the same as (and inany event no more favorably than) the Term B Loans and Existing Term Loans, and (1) other than currency, amortization, pricing(including interest rate margins, rate floors, fees, premiums and funding discounts) and maturity date, shall have the same terms as theTerm B Loans or (except for covenants or other provisions applicable only to the periods after the Term B Maturity Date) such termsas are reasonably satisfactory to the Administrative Agent (it being understood to the extent that any financial maintenance covenant isadded for the benefit of any Incremental Term Facility, no consent shall be required from the Administrative Agent or any Lender tothe extent that such financial maintenance covenant is also added for the benefit of all of the Term B Loans), provided that (A) anyIncremental Term Loan shall not have a final maturity date earlier than the Latest Maturity Date and (B) any Incremental Term Loanshall not have a Weighted Average Life to Maturity that is shorter than (1) if such Incremental Term Loan has amortization provisionssubstantially similar to those applicable to the then-existing Existing Term Loans, the Weighted Average Life to Maturity of thethen‑existing Existing Term Loans and (1) if such Incremental Term Loan has amortization provisions other than those described inclause (x) above, the Weighted Average Life to Maturity of the then-existing Term B Loans.(d) Each notice from the Borrower pursuant to this Section 2.13 shall set forth the requested amount and proposedterms of the relevant Incremental Term Loans. Any bank, financial institution or other Person that agrees with the Borrower to extendIncremental Term Loans (each an “Incremental Term Lender”), shall (1) if not already a Lender or a Person to whom a Lender mayassign one or more Loans without the consent of the Administrative Agent hereunder, be reasonably satisfactory to the AdministrativeAgent and (1) if not already a Lender, become a Lender under this Agreement pursuant to an amendment (each an “Incremental TermFacility Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Loan Parties, each suchIncremental Term Lender and the Administrative Agent. No Incremental Term Facility Amendment shall require the consent of anyLender other than the Incremental Term Lenders with respect to such Incremental Term Facility Amendment. No Lender shall beobligated to provide any Incremental Term Loans unless it so agrees in its sole and absolute discretion. An Incremental Term FacilityAmendment may, without the consent of any other Lender, effect such amendments to any Loan Documents as may be necessary orappropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.13. The effectiveness of anyIncremental Term Facility Amendment shall, unless otherwise agreed to by the Administrative Agent and the Incremental TermLenders (and subject to the proviso in the first sentence of Section 2.13(a)), be subject to the satisfaction on the date thereof of each ofthe conditions set forth in Section 5.2.(e) If the Effective Yield applicable to any Incremental Term Loan exceeds the Effective Yield of the Term B Loansby more than 0.50%, the rate of interest per annum applicable581821445.29\C072091\0303228to the Term B Loans shall be increased by an amount equal to the amount of such excess minus 0.50%. Notwithstanding anything tothe contrary herein contained, no amendment, modification or waiver of any provision of the Credit Agreement which would reducethe amount of any payment required as a result of the operation of this Section 2.13(e) shall be permitted without the written consent ofMajority Facility Lenders with respect to the Term B Facility, and this Section 2.13(e) may be amended, modified or waived withoutthe consent of any Lenders other than Majority Facility Lenders with respect to the Term B Facility.Section 2.14. Refinancing Amendments.(a) At any time after the Fourth Restatement Closing Date, the Borrower may obtain Credit Agreement RefinancingDebt from any Additional Refinancing Lender, in each case pursuant to a Refinancing Amendment.(b) The effectiveness of any Refinancing Amendment shall be subject to the satisfaction on the date thereof of each ofthe conditions set forth in Section 5.2 and, to the extent reasonably requested by the Administrative Agent, to receipt by theAdministrative Agent of (i) customary legal opinions, board resolutions and officers’ certificates consistent with those delivered on theFourth Restatement Closing Date other than changes to such legal opinions resulting from a change in law, change in fact or change tocounsels’ forms of opinions reasonably satisfactory to the Administrative Agent, and (ii) reaffirmation agreements and/or suchamendments to the Security Documents as may be reasonably requested by the Administrative Agent in order to ensure that suchCredit Agreement Refinancing Debt is provided with the benefit of the applicable Loan Documents.(c) Each issuance of Credit Agreement Refinancing Debt shall be in an aggregate principal amount that is (x) not lessthan $25,000,000, and (y) an integral multiple of $1,000,000.(d) Each of the parties hereto hereby agrees that this Agreement and the other Loan Documents may be amendedpursuant to a Refinancing Amendment, without the consent of any other Lenders, to the extent (but only to the extent) necessary to (i)reflect the existence and terms of the Credit Agreement Refinancing Debt incurred pursuant thereto, and (ii) effect such otheramendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of theAdministrative Agent and the Borrower, to effect the provisions of this Section 2.14, and the Required Lenders hereby expresslyauthorize the Administrative Agent to enter into any such Refinancing Amendment. Unless the Swingline Lender enters into theRefinancing Amendment for a Refinancing Revolving Facility, the Swingline Termination Date will not be extended to reflect theRefinancing Revolving Commitments in such Facility, the Refinancing Revolving Lenders with such Refinancing RevolvingCommitments shall not participate in Swingline Loans, and the use of the terms “Revolving Commitments” and “Revolving Loans” inconnection with the provisions of this Agreement governing Swingline Loans shall be deemed to exclude such Refinancing RevolvingCommitments and Refinancing Revolving Loans. Unless the Issuing Bank enters into the Refinancing Amendment for a RefinancingRevolving Facility, the LC Termination Date will not be extended to reflect the Refinancing Revolving Commitments in such Facility,the Refinancing Revolving Lenders with such Refinancing Revolving Commitments shall not participate in Letters of Credit, and theuse of the terms591821445.29\C072091\0303228“Revolving Commitments” and “Revolving Loans” in connection with the provisions of this Agreement governing Letters of Creditshall be deemed to exclude such Refinancing Revolving Commitments and Refinancing Revolving Loans.Section 2.15. Extensions of Term Loans and Revolving Commitments.(a) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “ExtensionOffer”) made from time to time by the Borrower to all Lenders of Term Loans with a like Maturity Date or Revolving Commitmentswith a like Maturity Date, in each case on a pro rata basis (based on the aggregate outstanding principal amount of the respective TermLoans or Revolving Commitments with the same Maturity Date, as the case may be) and on the same terms to each such Lender, theBorrower may from time to time offer to extend the maturity date of any Term Loans and/or Revolving Commitments and otherwisemodify the terms of such Term Loans and/or such Revolving Commitments pursuant to the terms of the relevant Extension Offer(including, without limitation, by changing the interest rate or fees payable in respect of such Term Loans and/or such RevolvingCommitments (and related outstandings) and/or modifying the amortization schedule in respect of such Term Loans) (each, an“Extension”, and each group of Term Loans or Revolving Commitments, as applicable, in each case as so extended, as well as theoriginal Term Loans and the original Revolving Commitments (in each case not so extended), being a separate Class; any ExtendedTerm Loans shall constitute a separate Class of Term Loans from the Class of Term Loans from which they were converted, and anyExtended Revolving Commitments shall constitute a separate Class of Revolving Commitments from the Class of RevolvingCommitments from which they were converted), so long as the following terms are satisfied: (1) no Default shall have occurred and becontinuing at the time an Extension Offer is delivered to the Lenders, (1) except as to pricing (including interest rate margins, ratefloors, fees, premiums and funding discounts) and final maturity, the Revolving Commitment of any Revolving Lender (an “ExtendingRevolving Lender”) extended pursuant to an Extension (an “Extended Revolving Commitment”), and the related outstandings, shall bea Revolving Commitment (or related outstandings, as the case may be) with the same terms as the applicable original RevolvingCommitments (and related outstandings); provided that at no time shall there be Revolving Commitments hereunder (includingExtended Revolving Commitments and any original Revolving Commitments) which have more than three different Maturity Dates,(1) except as to pricing (including interest rate margin, rate floors, fees, premiums and funding discounts), amortization, final maturitydate, required prepayment dates and participation in prepayments (which shall, subject to immediately succeeding clauses (iv), (v) and(vi), be determined by the Borrower and set forth in the relevant Extension Offer), the Term Loans of any Term Lender (an“Extending Term Lender”) extended pursuant to any Extension (“Extended Term Loans”) shall be not materially more favorable,taken as a whole, including with respect to covenants and events of default, to the Extending Term Lender, in the good faithdetermination of the Borrower and the Administrative Agent, as the Class of Term Loans subject to such Extension Offer, (1) the finalmaturity date of any Extended Term Loans shall be no earlier than the Existing Facility Maturity Date, (1) the Weighted Average Lifeto Maturity of any Extended Term Loans shall be no shorter than the remaining Weighted Average Life to Maturity of the Term Loansextended thereby, (1) any Extended Term Loans and Extended Revolving Loans may participate on a pro rata basis or a less than prorata basis (but not greater than a pro rata basis) in any mandatory repayments or prepayments601821445.29\C072091\0303228hereunder, in each case as specified in the respective Extension Offer, (1) if the aggregate principal amount of applicable Term Loans(calculated on the face amount thereof) or applicable Revolving Commitments, as the case may be, in respect of which applicableTerm Lenders or applicable Revolving Lenders, as the case may be, shall have accepted the relevant Extension Offer (as hereinafterprovided) shall exceed the maximum aggregate principal amount of applicable Term Loans or applicable Revolving Commitments, asthe case may be, offered to be extended by the Borrower pursuant to such Extension Offer, then the applicable Term Loans orapplicable Revolving Loans, as the case may be, of the applicable Term Lenders or applicable Revolving Lenders, as the case may be,shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings ofrecord) with respect to which such Term Lenders or such Revolving Lenders, as the case may be, have accepted such Extension Offer(as hereinafter provided), (1) any Extended Term Loans and Extended Revolving Loans may be secured by the Collateral securing theLoans being extended thereby and with the same priority as the Loans being extended thereby, (1) all documentation in respect of suchExtension shall be consistent with the foregoing, and (1) any applicable Minimum Extension Condition shall be satisfied unless waivedby the Borrower. Following any such Extension Offer, the Administrative Agent shall notify the applicable Lenders thereof, each ofwhom shall, in its sole discretion, determine whether or not to accept such Extension Offer.(b) With respect to all Extensions accepted by the relevant Lenders and consummated by the Borrower pursuant to thisSection 2.15, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Sections 2.6 or2.7, and (ii) no Extension Offer is required to be in any minimum amount or any minimum increment; provided that the Borrower mayat its election specify as a condition (a “Minimum Extension Condition”) to consummating any such Extension that a minimum amount(to be determined and specified in the relevant Extension Offer in the Borrower’s sole discretion and which may be waived by theBorrower) of Term Loans or Revolving Commitments (as applicable) of any or all applicable Classes be tendered. The AdministrativeAgent and the Lenders hereby consent to the Extensions and the other transactions contemplated by this Section 2.15 (including, forthe avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Term Loans and/or Extended RevolvingCommitments on such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provisionof this Agreement (including, without limitation, Sections 2.6, 2.7 and 2.11) or any other Loan Document that may otherwise prohibitany such Extension or any other transaction contemplated by this Section 2.15.(c) The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreementand the other Loan Documents with the Borrower as may be necessary in order to establish new Classes or sub-Classes in respect ofRevolving Commitments or Term Loans so extended and such technical amendments as may be necessary or appropriate in thereasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new Classes or sub-Classes, in each case on terms consistent with this Section 2.15. Notwithstanding the foregoing, the Administrative Agent shall havethe right (but not the obligation) to seek the advice or concurrence of the Required Lenders with respect to any matter contemplated bythis Section 2.15(c) and, if the Administrative Agent seeks such advice or concurrence, it shall be permitted to enter into suchamendments with the Borrower in accordance611821445.29\C072091\0303228with any instructions actually received by the Administrative Agent from Required Lenders and shall also be entitled to refrain fromentering into such amendments with the Borrower unless and until it shall have received such advice or concurrence; provided,however, that whether or not there has been a request by the Administrative Agent for any such advice or concurrence, all suchamendments entered into with the Borrower by the Administrative Agent hereunder shall be binding and conclusive on the Lenders.Without limiting the foregoing, in connection with any Extensions the respective Loan Parties shall (at their expense) amend (and theAdministrative Agent is hereby directed to amend) any Mortgage that has a maturity date prior to the then Latest Maturity Date so thatsuch maturity date is extended to the then Latest Maturity Date (or such later date as may be advised by local counsel to theAdministrative Agent).(d) In connection with any Extension, the Borrower shall provide the Administrative Agent at least fifteen (15)Business Days’ (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree tosuch procedures, if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably toaccomplish the purposes of this Section 2.15.(e) Notwithstanding the foregoing provisions of this Section 2.15 and, for the avoidance of doubt, no Lender shallhave such Lender’s Commitment or Loans extended without the written consent of such Lender. Unless the Swingline Lender entersinto the Extension Amendment for an Extended Revolving Facility, the Swingline Termination Date will not be extended to reflect theExtended Revolving Commitments in such Facility, the Extending Revolving Lenders with such Extended Revolving Commitmentsshall not participate in Swingline Loans, and the use of the terms “Revolving Commitments” and “Revolving Loans” in connectionwith the provisions of this Agreement governing Swingline Loans shall be deemed to exclude such Extended Revolving Commitmentsand Extended Revolving Loans. Unless the Issuing Bank enters into the Extension Amendment for an Extended Revolving Facility,the LC Termination Date will not be extended to reflect the Extended Revolving Commitments in such Facility, the ExtendingRevolving Lenders with such Extended Revolving Commitments shall not participate in Letters of Credit, and the use of the terms“Revolving Commitments” and “Revolving Loans” in connection with the provisions of this Agreement governing Letters of Creditshall be deemed to exclude such Extended Revolving Commitments and Extended Revolving Loans.ARTICLE 3 INTEREST, FEES, YIELD PROTECTION, ETC.Section 3.1. Interest(a) The Existing Facility Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plusthe Applicable Margin. The Existing Facility Loans comprising each Eurodollar Borrowing shall bear interest at the LIBO Rate for theInterest Period in effect for such Borrowing plus the Applicable Margin. The Loans comprising each Swingline Borrowing shall bearinterest at the Alternate Base Rate plus the Applicable Margin for the Swingline Interest Period in effect for such Borrowing. Subjectto Section 2.13(e), the Term B Loans621821445.29\C072091\0303228comprising each ABR Borrowing shall bear interest at a rate per annum equal to (1) the Applicable Margin plus (1) the higher of theAlternate Base Rate and the ABR Floor. Subject to Section 2.13(e), the Term B Loans comprising each Eurodollar Borrowing shallbear interest at a rate per annum equal to (1) the Applicable Margin plus (1) the higher of the LIBO Rate and the LIBO Floor. EachIncremental Term Loan, Refinancing Revolving Loan, Refinancing Term Loan, Extended Revolving Loan and Extended Term Loanshall bear interest at the rate set forth in the applicable Facility Amendment.(b) Notwithstanding the foregoing, if any principal of or interest on any Loan, any reimbursement obligation in respectof any LC Disbursement or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at statedmaturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annumequal to 2% plus the rate applicable to ABR Borrowings of the applicable Loans as provided in the preceding paragraph of thisSection. In addition, notwithstanding the foregoing, if an Event of Default under Sections 8(a), (b), (h), (i) or (j) has occurred and iscontinuing, then, so long as such Event of Default is continuing, all outstanding principal of each Loan and all unreimbursedreimbursement obligations in respect of all LC Disbursements shall, without duplication of amounts payable under the precedingsentence, bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate otherwise applicable to suchLoan or LC Disbursement, as the case may be, as provided in the preceding paragraph of this Section. In addition, notwithstanding theforegoing, if an Event of Default (other than an Event of Default under Sections 8(a), (b), (h), (i) or (j)) has occurred and is continuing,then, if the Administrative Agent or Lenders holding more than 50% of the Total Credit Exposure of all Lenders of all Classes affectedthereby, taken as a whole, request, so long as such Event of Default is continuing, all outstanding principal of each Loan and allunreimbursed reimbursement obligations in respect of all LC Disbursements shall, without duplication of amounts payable under thepreceding sentence, bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate otherwise applicable tosuch Loan or LC Disbursement, as the case may be, as provided in the preceding paragraph of this Section.(c) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan, providedthat (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in the event of any repayment orprepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment orprepayment, and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor,accrued interest on such Loan shall be payable on the effective date of such conversion.(d) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed byreference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basisof a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (includingthe first day but excluding the last day). The applicable Alternate Base Rate and the applicable LIBO Rate shall be determined by theAdministrative Agent, and such determination shall be conclusive absent demonstrable error.631821445.29\C072091\0303228Section 3.2. Interest Elections(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request or designated bySection 2.3 and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request ordesignated by Section 2.3. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue suchBorrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. TheBorrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shallbe allocated ratably among the applicable Lenders holding the Loans comprising such Borrowing, and the Loans comprising each suchportion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be convertedor continued.(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such electionby telephone or e-mail by the time that a Borrowing Request would be required under Section 2.3 if the Borrower were requesting aBorrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic or e-mailInterest Election Request shall be irrevocable and shall be confirmed by no later than 3:00 p.m., New York City time, on the date ofsuch request by hand delivery, e‑mail or facsimile to the Administrative Agent of a copy of a written Interest Election Request signedby the Borrower.(c) Each telephonic, e-mail and written Interest Election Request shall specify the following information:(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected withrespect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case theinformation to be specified pursuant to clauses (iii) and (iv) of this paragraph shall be specified for each resulting Borrowing);(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effectto such election, which shall be a period contemplated by the definition of the term “Interest Period”.If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shallbe deemed to have selected an Interest Period of one month’s duration.641821445.29\C072091\0303228(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each applicableLender of the details thereof and of such Lender’s portion of each resulting Borrowing.(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior tothe end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such InterestPeriod, such Borrowing shall be converted to a Eurodollar Borrowing with an Interest Period of one month. Notwithstanding anycontrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of theLenders holding more than 50% of the Total Credit Exposure of all Classes affected thereby, taken as a whole, so notifies theBorrower, then, with respect to each such Class, so long as an Event of Default is continuing, (i) no outstanding Borrowing may beconverted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABRBorrowing at the end of the Interest Period applicable thereto.Section 3.3. Fees(a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender having a RevolvingCommitment under the Existing Revolving Facility, a commitment fee, which shall accrue at a rate per annum equal to theCommitment Fee Rate on the daily amount of such unused Revolving Commitment (provided that Swingline Loans shall not bedeemed to be a use of the Revolving Commitments for the purpose of the calculation of such commitment fee) during the period fromand including the Fourth Restatement Closing Date to but excluding the date on which such Revolving Commitment terminates (itbeing understood that LC Exposure constitutes a use of the Revolving Commitment). Accrued commitment fees and undrawn feesshall be payable in arrears on the last day of March, June, September and December of each year, each date on which the applicableCommitments are permanently reduced and on the date on which the applicable Commitments terminate, commencing on the first suchdate to occur after the Fourth Restatement Closing Date. All commitment fees and undrawn fees shall be computed on the basis of ayear of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).(b) The Borrower agrees to pay to (i) the Administrative Agent for the account of each Revolving Lender aparticipation fee with respect to its participations in Letters of Credit, which shall accrue at rate per annum equal to the ApplicableMargin (with respect to Eurodollar Borrowings) on the daily amount of such Lender’s LC Exposure (excluding any portion thereofattributable to unreimbursed LC Disbursements) during the period from and including the Fourth Restatement Closing Date to butexcluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceasesto have any LC Exposure and (ii) to the Issuing Bank for its own account a fronting fee, which shall accrue at a rate per annum equalto 0.25% on the daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) withrespect to each Letter of Credit during the period from and including the Fourth Restatement Closing Date to but excluding the later ofthe date of termination of the Revolving Commitments and the date on which there ceases to be any such LC651821445.29\C072091\0303228Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter ofCredit or processing of drawings thereunder. Accrued participation fees and fronting fees shall be payable in arrears on the last day ofMarch, June, September and December of each year, commencing on the first such date to occur after the Fourth Restatement ClosingDate; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such feesaccruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to theIssuing Bank pursuant to this paragraph shall be payable within ten days after demand. All participation fees and fronting fees shall becomputed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day butexcluding the last day).(c) The Borrower agrees to pay to each Credit Party, for its own account, the fees and other amounts payable inconnection herewith in the amounts and at the times separately agreed upon between the Borrower and such Credit Party.(d) All fees and other amounts payable hereunder shall be paid on the dates due, in immediately available funds to theAdministrative Agent for distribution, in the case of commitment fees, undrawn fees, and participation fees, to the Lenders. Fees paidhereunder shall not be refundable under any circumstances.Section 3.4. Alternate Rate of InterestIf prior to the commencement of any Interest Period for a Eurodollar Borrowing:(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequateand reasonable means do not exist for ascertaining the LIBO Rate, as applicable, for such Interest Period; or(b) the Administrative Agent is advised by the Required Lenders that the LIBO Rate for such Interest Period will notadequately and fairly reflect the cost to such Lenders of making or maintaining its Loan included in such Borrowing for such InterestPeriod;then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly aspracticable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise tosuch notice no longer exist (and the Administrative Agent shall give such notice promptly upon having actual knowledge that suchcircumstances no longer exist), (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation ofany Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing,such Borrowing shall be made as an ABR Borrowing.Section 3.5. Increased Costs; Illegality(a) If any Change in Law shall:661821445.29\C072091\0303228(i) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Eurodollar Loans madeby such Credit Party or any Letter of Credit or participations therein, or change the basis of taxation of payments to suchLender in respect thereof (other than relating to Taxes, which shall be governed exclusively by Section 3.7, or the impositionof, or any change in the rate of, any Excluded Taxes payable by a Credit Party);(ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, depositswith or for the account of, or credit extended by, any Credit Party; or(iii) impose on any Credit Party or the London interbank market any other condition affecting this Agreement, anyEurodollar Loans made by such Credit Party or any Letter of Credit or participations therein,and the result of any of the foregoing shall be to increase the cost to such Credit Party, by an amount which such Credit Partyreasonably deems to be material, of making or maintaining any Eurodollar Loan or the cost to such Credit Party, by an amount whichsuch Credit Party reasonably deems to be material, of issuing, participating in or maintaining any Letter of Credit hereunder or toincrease the cost to such Credit Party or to reduce the amount of any sum received or receivable by such Credit Party, by an amountwhich such Credit Party reasonably deems to be material, hereunder (whether of principal, interest or otherwise), then the Borrowerwill pay to such Credit Party such additional amount or amounts as will compensate such Credit Party for such additional costsincurred or reduction suffered.(b) If any Credit Party determines that any Change in Law regarding capital or liquidity requirements has or wouldhave the effect of reducing the rate of return on such Credit Party’s capital or on the capital of such Credit Party’s holding company, ifany, as a consequence of this Agreement or the Loans made, the Letters of Credit issued or the participations therein held, by suchCredit Party to a level below that which such Credit Party or such Credit Party’s holding company could have achieved but for suchChange in Law (taking into consideration such Credit Party’s policies and the policies of such Credit Party’s holding company withrespect to liquidity or capital adequacy), by an amount reasonably deemed by such Credit Party to be material, then from time to timethe Borrower will pay to such Credit Party such additional amount or amounts as will compensate such Credit Party or such CreditParty’s holding company for any such reduction suffered.(c) A certificate of a Credit Party setting forth in reasonable detail the calculation of the amount or amounts necessaryto compensate such Credit Party or its holding company, as applicable, as specified in paragraph (a) or (b) of this Section shall bedelivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Credit Party the amount shownas due on any such certificate within 10 Business Days after receipt thereof.(d) Failure or delay on the part of any Credit Party to demand compensation pursuant to this Section shall notconstitute a waiver of such Credit Party’s right to demand such compensation; provided that the Borrower shall not be required tocompensate a Credit Party671821445.29\C072091\0303228pursuant to this Section for any increased costs or reductions incurred more than nine months prior to the date that such Credit Partynotifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Credit Party’s intention toclaim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive,then the nine month period referred to above shall be extended to include the period of retroactive effect thereof.(e) Notwithstanding any other provision of this Agreement, if, after the Fourth Restatement Closing Date any Changein Law shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or to give effect to its obligations ascontemplated hereby with respect to any Eurodollar Loan, then, by written notice to the Borrower and to the Administrative Agent:(i) such Lender may declare that Eurodollar Loans will not thereafter (for the duration of such unlawfulness) be madeby such Lender hereunder (or be continued for additional Interest Periods) and ABR Loans will not thereafter (for suchduration) be converted into Eurodollar Loans, whereupon any request for a Eurodollar Borrowing or to convert an ABRBorrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing, as applicable, for an additional Interest Periodshall, as to such Lender only, be deemed a request for an ABR Loan (or a request to continue an ABR Loan as such for anadditional Interest Period or to convert a Eurodollar Loan into an ABR Loan, as applicable), unless such declaration shall besubsequently withdrawn; and(ii) such Lender may require that all outstanding Eurodollar Loans made by it be converted to ABR Loans, in whichevent all such Eurodollar Loans shall be automatically converted to ABR Loans, as of the effective date of such notice asprovided in the last sentence of this paragraph.In the event any Lender shall exercise its rights under (i) or (ii) of this paragraph, all payments and prepayments of principal that wouldotherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender or the converted EurodollarLoans of such Lender shall instead be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from theconversion of, such Eurodollar Loans, as applicable. For purposes of this paragraph, a notice to the Borrower by any Lender shall beeffective as to each Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest Period currently applicable to suchEurodollar Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.Section 3.6. Break Funding PaymentsIn the event of (a) the payment or prepayment (voluntary or otherwise) of any principal of any Eurodollar Loan otherthan on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of anyEurodollar Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to borrow,convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whethersuch notice may be revoked under Section 2.7(g) and is revoked in accordance therewith), then, in any such event, the Borrower shallcompensate each applicable Lender in an amount equal to the excess, if any, of (i) the amount of interest that would681821445.29\C072091\0303228have accrued on the principal amount of such Loan had such event not occurred, at the LIBO Rate that would have been applicable tosuch Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of afailure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan) excluding, however, theApplicable Margin included therein, if any, over (ii) the amount of interest (as reasonably determined by such Lender) that wouldaccrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement ofsuch period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of anyLender setting forth in reasonable detail the calculations of any amount or amounts that such Lender is entitled to receive pursuant tothis Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender theamount shown as due on any such certificate within 10 days after receipt thereof.Section 3.7. Taxes(a) Any and all payments by or on account of any obligation of any Loan Party hereunder and under any other LoanDocument shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes, provided that, if suchLoan Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall beincreased as necessary so that, after making all required deductions (including deductions applicable to additional sums payable underthis Section), the applicable Credit Party receives an amount equal to the sum it would have received had no such deductions beenmade, (ii) such Loan Party shall make such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevantGovernmental Authority in accordance with applicable law.(b) In addition, the Loan Parties shall pay any Other Taxes to the relevant Governmental Authority in accordance withapplicable law.(c) The Borrower shall indemnify each Credit Party, within ten days after written demand therefor (which demandshall set forth the amount and the reasons therefor in reasonable detail), for the full amount of any Indemnified Taxes or Other Taxes(whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant GovernmentalAuthority) paid by such Credit Party on or with respect to any payment by or on account of any obligation of any Loan Party under theLoan Documents (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under thisSection) and any penalties, interest and reasonable out-of-pocket expenses arising therefrom or with respect thereto (in the event thatthe Borrower is not in default of its obligations under this Section 3.7, excluding penalties and interest to the extent attributable to theactions or omissions of such Credit Party), whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed orasserted by the relevant Governmental Authority. A certificate setting forth the amount of such payment or liability and the reasonstherefor in reasonable detail delivered to the Borrower by a Credit Party, or by the Administrative Agent on its own behalf or on behalfof a Credit Party, shall be conclusive absent manifest error. If the Borrower reasonably believes that Indemnified Taxes or Other Taxeswere not correctly or legally asserted, the applicable Credit Party or Transferee will reasonably cooperate with the Borrower to obtain arefund of such Indemnified Taxes or Other Taxes for the691821445.29\C072091\0303228benefit of the Borrower, provided that the Borrower shall reimburse the applicable Credit Party for reasonable out-of-pocket expensesarising from such cooperation. Each Credit Party agrees that promptly after it receives written notice of any Indemnified Taxes orOther Taxes imposed or asserted on it, it shall endeavor to give notice thereof to the Borrower, provided that such Credit Party shallhave no liability to the Borrower for the failure to give any such notice.(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to aGovernmental Authority, the Borrower shall deliver to the Administrative Agent the a copy of a receipt issued by such GovernmentalAuthority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonablysatisfactory to the Administrative Agent.(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of thejurisdiction in which the relevant Loan Party is located, or under any treaty to which such jurisdiction is a party, with respect topayments under the Loan Documents shall deliver to the Borrower (with a copy to the Administrative Agent), such properly completedand executed documentation prescribed by applicable law and reasonably requested by the Borrower from time to time as will permitsuch payments to be made without withholding or at a reduced rate.(f) Without limiting the generality of the foregoing, (i) each Lender that is not a United States person (as such term isdefined in Section 7701(a)(30) of the Code) (a “Non‑US Lender”) shall to the extent it is legally able to do so deliver to the Borrowerand the Administrative Agent (or, in the case of a Participant, to the Borrower and to the Lender from which the related participationshall have been purchased) (A) two accurate and complete copies of IRS Form W‑8BEN or IRS Form W-8BEN-E, as applicable, (B)two accurate and complete copies of IRS Form W‑8ECI, (C) in the case of a Non‑US Lender claiming exemption from United Statesfederal withholding Tax under Section 881(c) of the Code with respect to payments of “portfolio interest,” (x) a certificate to the effectthat such Non-US Lender is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder”of the Borrower within the meaning of Sections 871(h)(3)(B) and 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation”described in Section 881(c)(3)(C) of the Code (a “US Tax Compliance Certificate”), and (y) duly completed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, (D) to the extent a Non-US Lender is not the beneficial owner, two duly executedoriginals of IRS Form W-8IMY, accompanied by IRS Forms W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E as applicable,IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Non-US Lender isa partnership and one or more direct or indirect partners of such Non-US Lender are claiming the portfolio interest exception, suchNon-US Lender shall provide a US Tax Compliance Certificate on behalf of each such direct and indirect partner, or (E) anysubsequent versions or successors to such forms, in each case properly completed and duly executed by such Non-US Lender claimingcomplete exemption from, or a reduced rate of, United States federal withholding Tax on all payments by the Borrower or any LoanParty under any Loan Document, and (ii) each Lender (and, in the case of a non-United States pass-through entity, each of itsbeneficial owners) that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) shall deliver to theBorrower and the Administrative Agent two701821445.29\C072091\0303228accurate and complete copies of IRS Form W-9, or any subsequent versions or successors to such form. The forms referred to inclauses (i) and (ii) shall be delivered by each Lender on or before the date it becomes a party to this Agreement (or, in the case of anyParticipant, on or before the date such Participant purchases the related participation). In addition, each Lender shall deliver such formspromptly upon the obsolescence or invalidity of any form previously delivered by such Lender. Each Lender shall promptly notify theBorrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (orany other form of certification adopted by the United States taxing authorities for such purpose).(g) If a Credit Party determines, in its sole discretion, that it has received a refund of or credit against any Taxes orOther Taxes as to which it has been indemnified by a Loan Party or with respect to which a Loan Party has paid additional amountspursuant to this Section 3.7, it shall pay to the Loan Party an amount equal to such refund or credit (but only to the extent of indemnitypayments made, or additional amounts paid, by the Loan Party under this Section 3.7 with respect to Taxes or Other Taxes giving riseto such refund or credit), net of all out-of-pocket expenses of the Credit Party and without interest (other than any interest paid by therelevant Governmental Authority with respect to such refund or credit); provided that the Loan Party, upon the request of the CreditParty agrees to repay the amount paid over to the Loan Party (plus any penalties, interest or other charges imposed by the relevantGovernmental Authority) to the Credit Party in the event the Credit Party is required to repay such refund to such GovernmentalAuthority. This paragraph shall not be construed to require the Credit Party to make available its tax returns (or any other informationrelating to its taxes that it deems confidential) to the Loan Party or any other Person.(h) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding taximposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including thosecontained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the AdministrativeAgent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the AdministrativeAgent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and suchadditional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrowerand the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied withsuch Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposesof this paragraph (h), “FATCA” shall include any amendments made to FATCA after the Fourth Restatement Closing Date.Section 3.8. Mitigation ObligationsIf any Credit Party requests compensation under Section 3.5, or if the Borrower is required to pay any additionalamount to any Lender or any Governmental Authority for the account of any Credit Party pursuant to Section 3.7, then such CreditParty shall use reasonable efforts to designate a different lending office for funding or booking its Loans or Letters of Credit (or anyparticipation therein) hereunder or to assign its rights and obligations hereunder to another of its711821445.29\C072091\0303228offices, branches or affiliates, if, in the good faith judgment of such Credit Party, such designation or assignment (i) would eliminate orreduce amounts payable pursuant to Sections 3.5 or 3.7, as applicable, in the future and (ii) would not subject such Credit Party to anyunreimbursed cost or expense and would not otherwise be materially disadvantageous to such Credit Party. The Borrower herebyagrees to pay all reasonable costs and out of pocket expenses incurred by any Credit Party in connection with any such designation orassignment.Section 3.9. Replacement of LendersIf (i) any Credit Party requests compensation under Section 3.5, or the Borrower is required to pay any additionalamount to any Credit Party or any Governmental Authority for the account of any Credit Party pursuant to Section 3.7, (ii) any Lenderwith an unused Commitment is a Defaulting Lender, or (iii) any Lender notifies the Borrower pursuant to Section 3.5(e) that it isunlawful for such Lender to make or maintain Eurodollar Loans, then the Borrower may, at its sole expense and effort, upon notice tosuch Credit Party and the Administrative Agent, require such Credit Party to assign and delegate, without recourse (in accordance withand subject to the restrictions contained in Section 10.4), all its interests, rights and obligations under this Agreement to an assignee thatshall assume such obligations (which assignee may be another Credit Party, if a Credit Party accepts such assignment); provided that(a) the Borrower shall have received the prior written consent of the Administrative Agent (and if a Revolving Commitment is beingassigned, the Issuing Bank and the Swingline Bank), which consents shall not unreasonably be withheld, conditioned or delayed, (b)such Credit Party shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations inLC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to theextent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (c) unless theAdministrative Agent otherwise agrees, the Borrower, the Defaulting Lender (if any) or such assignee shall have paid to theAdministrative Agent the processing and recordation fee specified in Section 10.4(b), and (d) in the case of any such assignmentresulting from a claim for compensation under Section 3.5 or payments required to be made pursuant to Section 3.7, such assignmentwill result in a reduction in such compensation or payments. A Credit Party shall not be required to make any such assignment anddelegation if, prior thereto, as a result of a waiver by such Credit Party or otherwise, the circumstances entitling the Borrower to requiresuch assignment and delegation cease to apply.ARTICLE 4 REPRESENTATIONS AND WARRANTIESThe Parent represents and warrants to the Credit Parties that:Section 4.1. Organization; PowersEach of the Parent, the Borrower and the Subsidiaries (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) is duly organized, validly existing and in good standing under the laws of thejurisdiction of its organization, has all requisite corporate or other organizational power and authority to carry on its business as now721821445.29\C072091\0303228conducted and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in aMaterial Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification isrequired by applicable law.Section 4.2. Authorization; EnforceabilityThe Transactions to be entered into by each Loan Party are within the corporate, partnership or other analogous powersof such Loan Party to the extent it is a party thereto and have been duly authorized by all necessary corporate, partnership or otheranalogous and, if required, equity holder action. Each Loan Document has been duly executed and delivered by each Loan Party to theextent it is a party thereto and constitutes a legal, valid and binding obligation thereof, enforceable against such Loan Party inaccordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affectingcreditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) andthe implied covenants of good faith and fair dealing.Section 4.3. Governmental Approvals; No ConflictsThe Transactions (i) do not require any consent or approval of, registration or filing with, or any other action by, anyGovernmental Authority, except (a) such as have been or prior to or concurrently with the consummation of the Transactions will beobtained or made and are or prior to or concurrently with the consummation of the Transactions will be in full force and effect (exceptsuch consents, approvals, registrations or filings which will be required at the time, if any, of the exercise of remedies under the LoanDocuments by the Administrative Agent and the Lenders), (b) notices, if any, required to be filed with the FCC or any applicable StatePUC after the consummation of the Transactions and (c) consents, approvals, registrations, filings or actions which the failure to obtainor make would not reasonably be expected to result in a Material Adverse Effect, (ii) will not violate any applicable law or regulationor the charter, by-laws or other organizational documents of the Parent, the Borrower or any Subsidiary (other than NMTCSubsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) or any order of any Governmental Authority(subject to compliance with any applicable law or regulation which, upon the exercise of remedies hereunder by the AdministrativeAgent and the Lenders, requires filing with or approval of a Governmental Authority), except, in the case of any such applicable lawor regulation, for such violations that would not reasonably be expected to result in a Material Adverse Effect, (iii) will not violate orresult in a default under any material indenture, agreement or other instrument binding upon the Parent, the Borrower or any Subsidiaryor its assets (other than the Loan Documents), or give rise to a right thereunder to require any payment to be made by the Parent, theBorrower or any Subsidiary, or result in a default under any indenture for the Senior Notes, except for such violations, defaults andpayments that would not reasonably be expected to result in a Material Adverse Effect and (iv) will not result in the creation orimposition of any Lien on any asset of the Parent, the Borrower or any of the Subsidiaries (other than NMTC Subsidiaries to the extentnot reasonably expected to result in a Material Adverse Effect), other than, with respect to each Loan Party, Liens permitted bySection 7.2 and each Security Document to which such Loan Party is a party.731821445.29\C072091\0303228Section 4.4. Financial ConditionThe Parent has heretofore furnished to the Administrative Agent and the Lenders the following:(a) the consolidated balance sheets and related consolidated statements of income, cash flows and shareholders’ equityof (i) the Parent and its subsidiaries and (ii) the Borrower and the Subsidiaries, each as of and for the fiscal year ended December 31,2013, reported on by Grant Thornton LLP, a registered independent public accounting firm; and(b) with respect to the Borrower and the Subsidiaries, forecasts of financial performance through and including thefourth anniversary of the Fourth Restatement Closing Date (the “Forecasts”).The financial statements referred to above (other than the Forecasts) present fairly, in all material respects, the financial position andresults of operations and cash flows of such Persons as of such dates and for the indicated periods in accordance with GAAP, subjectin the case of the quarter-end statements to year-end audit adjustments and the absence of footnotes. The Forecasts have been preparedin good faith by the Parent and based on assumptions believed to be reasonable at the time they were made, it being understood thatforecasts by their nature are uncertain and no assurance is being given that the results reflected in such forecasted financial informationwill be achieved. Since December 31, 2013, there has been no material adverse change in the business, assets, operations or financialcondition of the Borrower and the Subsidiaries taken as a whole.Section 4.5. Properties(a) Each of the Parent, the Borrower and the Subsidiaries has good title to, or valid leasehold interests in, all its realand tangible personal property, except as would not reasonably be expected to have a Material Adverse Effect.(b) Each of the Parent, the Borrower and the Subsidiaries owns, or is entitled to use, all United States trademarks,trade names, copyrights, patents and trade secrets material to its business, and the use thereof by the Parent, the Borrower and theSubsidiaries does not infringe upon the rights of any other Person, except for any such failure to own or be entitled to use orinfringements that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.Section 4.6. Litigation and Environmental Matters(a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending againstor, to the knowledge of the Parent, threatened against (i) the Parent or any of its subsidiaries that would reasonably be expected,individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) the Parent, theBorrower or any of the Subsidiaries that relate to the execution, delivery, validity or enforceability of any Loan Document or theperformance of any of the Transactions by any of the parties thereto.741821445.29\C072091\0303228(b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate,would not reasonably be expected to result in a Material Adverse Effect, neither the Parent nor any of its subsidiaries (i) has failed tocomply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under anyEnvironmental Law, (ii) has become subject to any Environmental Liability, (iii) has received written notice of any claim with respectto any Environmental Liability or (iv) knows of any basis for any Environmental Liability.Section 4.7. Compliance with Laws and AgreementsEach of the Parent and its subsidiaries is in compliance with all laws, regulations (including the Communications Actand State Law) and orders of any Governmental Authority (including the FCC and State PUCs) applicable to it or its property and allindentures, agreements and other instruments binding upon it or its property, except, in each case, where the failure to do so,individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. No Default has occurred andis continuing.Section 4.8. Franchises, FCC, State PUC and Certain Copyright Matters(a) The Borrower and each Subsidiary possesses, or has the right to use, all Authorizations, and possesses, or hasrights under, agreements with public utilities and microwave transmission companies, satellite communications companies, poleattachment, use access or rental agreements and utility easements, including all licenses and permits, to: (i) operate the CommunicationsBusiness, except to the extent the absence thereof or failure to be in compliance therewith would not reasonably be expected to have aMaterial Adverse Effect, and (ii) consummate the Transactions. The Borrower and the Subsidiaries are in compliance with all suchAuthorizations, agreements, easements, licenses and permits with no known conflict with the valid rights of others, except to the extentsuch noncompliance or conflict would not reasonably be expected to have a Material Adverse Effect. No event has occurred whichwould permit the revocation or termination of any such Authorization, right, agreement, easement, license or permit which wouldreasonably be expected to have a Material Adverse Effect.(b) The Parent and each subsidiary thereof (i) have each duly and timely filed or caused to be filed (A) all registrationstatements for the operation of the Communications Business and other filings which are required to be filed under theCommunications Act and under State Law applicable to them and the Transactions, and (B) all reports, applications, documents,instruments and information required to be filed (1) with the FCC and State PUCs, as applicable, pursuant to all FCC rules, regulationsand requests and State Law applicable to them, or (2) pursuant to any Authorization, in each case, the failure of which to file wouldreasonably be expected to have a Material Adverse Effect, and (ii) is in compliance with the Communications Act and State Law(including, the rules and regulations of the FCC and State PUCs) and all Authorizations, the failure with which to comply wouldreasonably be expected to have a Material Adverse Effect. The Parent and each subsidiary thereof has recorded or deposited with andpaid to the United States Copyright Office and the Register of Copyrights all notices, statements of account, royalty fees and otherdocuments and instruments required under the Copyright Act, the failure of which to record, deposit or pay would reasonably beexpected to have a Material Adverse Effect. To the knowledge of the751821445.29\C072091\0303228Parent, as of the Fourth Restatement Closing Date neither the Borrower nor any Subsidiary (other than NMTC Subsidiaries to theextent not reasonably expected to result in a Material Adverse Effect) has any material liability to any Person for copyrightinfringement under the Copyright Act as a result of its business operations.(c) The Borrower and the Subsidiaries own or lease all of the property, plant and equipment necessary to operate theCommunications Business.(d) As of the Fourth Restatement Closing Date, the Borrower and the Subsidiaries, collectively, hold all materialAuthorizations required in connection with the Transactions and with the operation of the Communications Business and each suchAuthorization is validly issued and in full force and effect, unimpaired in any material respect by any act or omission by the Borroweror any Subsidiary. All such Authorizations are renewable by their terms or in the ordinary course of business without the need to (i)comply with any special qualification procedures not otherwise generally applicable to providers of one or more services similar to theCommunications Business in the State of Alaska, or (ii) to pay any amounts other than immaterial amounts, routine fees, and amountsin respect of rebuild obligations, except to the extent such renewal would not reasonably be expected to have a Material AdverseEffect.(e) To the best of the Parent’s knowledge, except as set forth in Schedule 4.8, neither the Parent nor any subsidiarythereof is a party to any investigation, notice of violation, order or complaint issued by or before the FCC, any State PUC or anyFranchise authority which would reasonably be expected to have a Material Adverse Effect. Except for such proceedings that affectthe communications industry or the other businesses of the Parent and its subsidiaries generally or as set forth in Schedule 4.8, there areno proceedings by or before the FCC, any State PUC or any Franchise authority which would reasonably be expected to have aMaterial Adverse Effect. Except as set forth in Schedule 4.8, the Parent has no knowledge of (i) any impending or threatenedinvestigation, notice of violation, order, complaint or proceeding before the FCC, any State PUC or any Franchise authority that wouldreasonably be expected to have a Material Adverse Effect, (ii) any pending or threatened non‑renewal, expiration, termination orrevocation of any Authorization that would reasonably be expected to have a Material Adverse Effect, or (iii) has any reasonable basisto expect that any Authorization the absence of which, individually or in the aggregate, would reasonably be expected to have aMaterial Adverse Effect, will not be renewed in the ordinary course.Section 4.9. Investment Company StatusNone of the Parent, the Borrower nor any of the Subsidiaries (other than NMTC Subsidiaries to the extent notreasonably expected to result in a Material Adverse Effect) is an “investment company” as defined in, or subject to regulation under,the Investment Company Act of 1940.Section 4.10. TaxesEach of the Parent, the Borrower and the Subsidiaries has timely filed or caused to be filed all Tax returns and reportsrequired to have been filed and has paid or caused to be paid all761821445.29\C072091\0303228Taxes required to have been paid by it, except (i) Taxes that are being contested in good faith by appropriate proceedings and forwhich the Parent, the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves to the extent required byGAAP or (ii) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.Section 4.11. ERISANo ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISAEvents for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect. Thepresent value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement ofFinancial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceedby more than $1,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligationsof all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not,as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value ofthe assets of all such underfunded Plans.Section 4.12. DisclosureAs of the Fourth Restatement Closing Date, the Parent has disclosed to the Credit Parties all agreements, instrumentsand corporate or other restrictions to which it or the Borrower or any Subsidiary is subject, and all other matters known to it, that,individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. None of the reports, financialstatements, certificates or other information concerning the Parent, the Borrower or any Subsidiary (other than the projections, budgetsor other estimates, or information of a general economic or industry nature and, in the case of NMTC Subsidiaries, only to extent of theParent’s actual knowledge) furnished by or on behalf of the Parent, the Borrower or any Subsidiary to any Credit Party in connectionwith the negotiation of the Loan Documents or delivered thereunder (as modified or supplemented by other information so furnished),taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein,in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projectedfinancial information, the Parent represents only that such information was prepared in good faith based upon assumptions believed tobe reasonable at the time they were made, it being understood that projections by their nature are uncertain and no assurance is beinggiven that the results reflected in such projected financial information will be achieved.Section 4.13. SubsidiariesSchedule 4.13 sets forth, as of the Fourth Restatement Closing Date, the name of, the chief executive office of, and theownership interest of (i) the Parent in the Borrower, and (ii) the Borrower in each of its subsidiaries (other than the NMTCSubsidiaries) and identifies each Subsidiary that is a Subsidiary Guarantor or an NMTC Subsidiary.771821445.29\C072091\0303228Section 4.14. InsuranceSchedule 4.14 sets forth a description of all insurance maintained by or on behalf of the Parent, the Borrower and theSubsidiaries (other than NMTC Subsidiaries) on the Fourth Restatement Closing Date. As of the Fourth Restatement Closing Date, allpremiums in respect of such insurance that are due and payable have been paid.Section 4.15. Labor MattersExcept for the Disclosed Matters and except as would not be reasonably likely to result in a Material Adverse Effect, (i)there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower,threatened, (ii) the hours worked by and payments made to employees of the Borrower and the Subsidiaries have not been in violationof the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters, (iii) all materialpayments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, onaccount of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the booksof the Borrower or such Subsidiary and (iv) the consummation of the Transactions will not give rise to any right of termination or rightof renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound.Section 4.16. SolvencyImmediately after the consummation of each Transaction on the Fourth Restatement Closing Date, (i) the fair value ofthe assets of the Borrower and the Subsidiaries, taken as a whole, at a fair valuation, will exceed their debts and liabilities,subordinated, contingent or otherwise; (ii) the present fair salable value of the property of the Borrower and the Subsidiaries, taken as awhole, will be greater than the amount that will be required to pay the probable liability of their debts and other liabilities, subordinated,contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each of the Borrower and the SubsidiaryGuarantors will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities becomeabsolute and matured; and (iv) each of the Borrower and the Subsidiary Guarantors will not have unreasonably small capital withwhich to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted followingsuch date.Section 4.17. Federal Reserve RegulationsNone of the Parent, the Borrower nor any of the Subsidiaries (other than NMTC Subsidiaries) is engaged principally, oras one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock. Immediatelybefore and immediately after giving effect to the making of each Loan and the issuance of each Letter of Credit, Margin Stock willconstitute less than 25% of the Borrower’s assets as determined in accordance with Regulation U.781821445.29\C072091\0303228Section 4.18. Use of ProceedsThe Borrower represents and warrants that it will use the proceeds of (a) the Revolving Loans, the Term B Loans andthe Letters of Credit for purposes permitted by Section 6.14 and (b) each Incremental Term Loan, if any, in accordance with theIncremental Term Facility Amendment applicable thereto. No part of the proceeds of any Loan or any Letter of Credit has been or willbe used, whether directly or indirectly, and whether immediately, incidentally or ultimately (i) to purchase, acquire or carry any MarginStock, or (ii) for any other purpose, in either case that entails a violation of any of the regulations of the Board, including RegulationsT, U and X.Section 4.19. Anti-Corruption Laws and Sanctions; Anti-Terrorism Laws(a) The Borrower and the Parent each have implemented and maintains in effect policies and procedures designed toensure compliance by the Parent, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws andapplicable Sanctions, and the Parent, and its Subsidiaries and to the knowledge of the Parent its directors, officers and employees, arein compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and no Loan Party is knowingly engaged inany activity that could reasonably be expected to result in such Loan Party being designated as a Sanctioned Person. None of (a) theParent, any of its Subsidiaries, or to the knowledge of the Parent or such Subsidiary any of their respective directors, officers oremployees, or (b) to the knowledge of the Parent, any agent of the Parent or any Subsidiary that will in each case act in any capacity inconnection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use ofproceeds or other transactions contemplated by the Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.(b) Neither the making of the Loans hereunder nor the use of the proceeds thereof will violate the Patriot Act, theTrading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department(31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or successor statutethereto. Each Loan Party and each of its Subsidiaries are in compliance in all material respects with the Patriot Act.ARTICLE 5 CONDITIONSSection 5.1. Initial Conditions.This Agreement shall not become effective, and the Existing Credit Agreement shall remain in full force and effect,until the date (the “Fourth Restatement Closing Date”) on which each of the following conditions is satisfied (or waived in accordancewith Section 10.2):791821445.29\C072091\0303228(a) Restatement. The Administrative Agent (or its counsel) shall have received this Agreement, executed and deliveredby (1) Required Lenders under and as defined in the Existing Credit Agreement, (1) all Term B Lenders, and (1) each Loan Party.(b) Security Documents. The Administrative Agent shall have received (1) evidence in all respects satisfactory to itthat Denali Media Holdings, Corp., an Alaska corporation, AWN and GCI Wireless have become parties to the Security Agreement as“Grantors” thereunder, and (1) each other Loan Document, executed and delivered by each Loan Party signatory thereto.(c) Ownership Structure. The Administrative Agent shall have received a certificate of the Borrower, dated the FourthRestatement Closing Date, attaching the organizational chart of GCI and all of its subsidiaries as of the Fourth Restatement ClosingDate. The organizational structure of GCI on the Fourth Restatement Closing Date shall be satisfactory to the Administrative Agent.(d) Pro Forma Balance Sheet. The Administrative Agent shall have received a consolidated pro forma balance sheetfor the Parent reflecting the Transactions (based on the projections previously delivered to the Lenders), and reasonably detailedprojections of the Financial Covenants for four years.(e) Fees. The Arrangers shall have received on or before the Fourth Restatement Closing Date all fees required to bepaid by the Borrower (including those to be passed on to the Lenders), and all reasonable out-of-pocket expenses required to be paidby the Borrower (including reasonable fees, disbursements and other charges of counsel to the Administrative Agent and theArrangers).(f) Solvency Certificate. The Administrative Agent shall have received a solvency certificate signed by a FinancialOfficer on behalf of the Borrower substantially in the form of Exhibit H.(g) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of thejurisdictions in which Uniform Commercial Code financing statements, or other filings or recordations should be made to evidence orperfect security interests in the Collateral, and such search shall reveal no liens on any of the Collateral, except for Liens permitted bySection 7.2 or liens to be discharged prior to or on the Fourth Restatement Closing Date.(h) Closing Certificate. The Administrative Agent shall have received a certificate of each of the Loan Parties, datedthe Fourth Restatement Closing Date, substantially in the form of Exhibit F, with appropriate insertions and attachments.(i) Financial Officer Certificate. The Administrative Agent shall have received a certificate of the Parent, dated theFourth Restatement Closing Date and signed by a Financial Officer of the Parent: (1) setting forth reasonably detailed calculationsdemonstrating that (A) the Total Leverage Ratio does not exceed 4.60:1.00, and (B) the Senior Leverage Ratio does not exceed2.25:1.00, each on a pro forma basis immediately after giving effect to the Transactions occurring801821445.29\C072091\0303228on the Fourth Restatement Closing Date, (1) certifying that no Material Adverse Effect has occurred, and no material adverse effect onthe performance of the Borrower and the Subsidiaries (other than NMTC Subsidiaries), taken as a whole, has occurred, in either casesince December 31, 2013, (1) certifying compliance with the conditions set forth in paragraphs (a) and (b) of Section 5.2, (1) either (A)attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by eachLoan Party and the validity against each Loan Party of the Loan Documents to which it is a party, and such consents, licenses andapprovals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required, (1) certifying thatthe performance by each Loan Party of its obligations under each Loan Document to which it is a party does not (A) violate anyapplicable law, statute, rule or regulations or (B) conflict with, or result in a default or event of default under, any material agreement ofany Loan Party, including, without limitation, any instrument or agreement (1) governing any debt or equity (or warrant or option withrespect thereto) of GCI and its subsidiaries, and (2) that would constitute a material contract of any Loan Party, (1) certifying thatsimultaneously with the making of the Term B Loans on the Fourth Restatement Closing Date, the AWN Transaction occurred, and(1) attaching a true, correct and complete copy of the AWN Purchase Agreement.(j) Legal Opinions. The Administrative Agent shall have received the following executed legal opinions: (i) the legalopinion of Sherman & Howard L.L.C., special counsel to the Loan Parties, substantially in the form of Exhibit E-1; (ii) the legalopinion of Stoel Rives LLP, special Alaska counsel to the Loan Parties, substantially in the form of Exhibit E-2; and (iii) the legalopinion of the Borrower by Tina Pidgeon, special internal FCC counsel to the Loan Parties, and Mark Moderow, special internalAlaska regulatory counsel to the Loan Parties, substantially in the form of Exhibit E-3.(k) Pledged Stock; Stock Powers. The Administrative Agent shall have received the certificates, if any, representingthe certificated shares of Equity Interests pledged on or prior to the Fourth Restatement Closing Date pursuant to the SecurityDocuments, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of thepledgor thereof.(l) Filings, Registrations and Recordings. Each Uniform Commercial Code financing statement required by theSecurity Documents to be filed in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lienon the Collateral described therein with the priority provided for in the Security Documents, shall have been delivered to theAdministrative Agent in proper form for filing.(m) No Default. No Default (as defined in the Existing Credit Agreement) shall have occurred and be continuing, andno Default shall have occurred and be continuing.(n) Notes. If any Lender shall have requested one, the Administrative Agent shall have received, for the account ofsuch Lender, an original Note, dated the Fourth Amendment Closing Date, executed by the Borrower and payable to such Lender.The Administrative Agent shall notify the Borrower and the Credit Parties of the Fourth Restatement Closing Date and such noticeshall be conclusive and binding.811821445.29\C072091\0303228Section 5.2. Conditions to Future Credit EventsThe obligation of each Lender to make a Loan on the occasion of any Borrowing (other than a continuation orconversion of an existing Borrowing), and of the Issuing Bank to issue, amend, renew or extend a Letter of Credit, is subject to thesatisfaction of the following conditions:(o) The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct inall material respects on and as of the date of such Borrowing or the date of such issuance, amendment, renewal or extension, asapplicable (except (i) to the extent that such representations and warranties relate to an earlier date, in which case such representationsand warranties shall be true and correct in all material respects as of such earlier date and (ii) that any representation and warranty thatis qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects without further qualification); and(p) at the time of and immediately after giving effect to such Borrowing or such issuance, amendment, renewal orextension, as applicable, no Default shall or would exist.Each such Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute arepresentation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.ARTICLE 6 AFFIRMATIVE COVENANTSUntil the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees andother amounts payable hereunder (other than contingent or indemnification obligations not then due) shall have been paid in full incash and all Letters of Credit have expired (or have been cash collateralized or otherwise provided for in full in a manner reasonablysatisfactory to the Issuing Bank) and all LC Disbursements have been reimbursed, the Parent covenants and agrees with the CreditParties that:Section 6.1. Financial Statements and Other InformationThe Parent will furnish or cause to be furnished to the Administrative Agent:(a) within 120 days after the end of each fiscal year, (i) the Parent’s audited consolidated balance sheet and relatedconsolidated statements of income, cash flows and shareholders’ equity, and (ii) the Borrower’s audited consolidated balance sheet andrelated consolidated statements of income, cash flows and shareholders’ equity, in each case set forth in this paragraph (a) as of the endof and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by GrantThornton LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualificationor exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financialstatements present fairly in all material respects the financial position and results of operations of (x) in the case of the financialstatements referred to in clause821821445.29\C072091\0303228(i) above, the Parent on a consolidated basis in accordance with GAAP consistently applied, and (y) in the case of the financialstatements referred to in clause (ii) above, the Borrower on a consolidated basis in accordance with GAAP consistently applied;(b) within 60 days after the end of each of the first three fiscal quarters of each fiscal year, (i) the Parent’s consolidatedbalance sheet and related consolidated statements of income and cash flows, and (ii) the Borrower’s consolidated balance sheet andrelated consolidated statements of income and cash flows, in each case set forth in this paragraph (b) as of the end of and for such fiscalquarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the correspondingperiod or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer aspresenting fairly in all material respects the financial position and results of operations of (x) in the case of the financial statementsreferred to in clause (i) above, the Parent on a consolidated basis in accordance with GAAP consistently applied, subject to normalyear-end audit adjustments and the absence of footnotes, and (y) in the case of the financial statements referred to in clause (ii) above,the Borrower on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments andthe absence of footnotes;(c) concurrently with any delivery of financial statements under paragraph (a) or (b) above, a Compliance Certificatesigned by a Financial Officer of the Parent (i) certifying as to whether a Default has occurred and is continuing and, if a Default hasoccurred and is continuing, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) settingforth (A) reasonably detailed calculations demonstrating compliance with the Financial Covenants as of the most recent fiscal quarterend contemplated by such financial statements, (B) the Subsidiary Guarantors as of the date of such Compliance Certificate, and (C)the Excluded Subsidiaries as of the date of such Compliance Certificate, and (iii) containing either a certification that there has been nochange to the information about the Loan Parties and their property disclosed in the schedules to the Security Documents or, after thedelivery of the first certification delivered pursuant to this subsection, as previously certified, or, if so, specifying all such changes;(d) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements andother materials filed by the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries) with the SEC, or with any nationalsecurities exchange, as the case may be;(e) at least 5 Business Days prior to the consummation of each transaction constituting a Significant Transaction, theParent shall have delivered to the Administrative Agent a certificate of the Parent signed by a Financial Officer thereof describing suchtransaction in reasonable detail and certifying that such Significant Transaction complies with each Section hereof under which suchtransaction constitutes a Significant Transaction (which shall have attached thereto reasonably detailed backup data and calculationsshowing such compliance);(f) within 30 days after the beginning of each fiscal year, an annual consolidated forecast for the Borrower and theSubsidiaries for such fiscal year, including projected consolidated statements of income of the Borrower and the Subsidiaries, all inreasonable detail acceptable to the Administrative Agent;831821445.29\C072091\0303228(g) promptly such other information with documentation required by bank regulatory authorities under applicable“know your customer” and Anti-Money Laundering rules and regulations (including, without limitation, the Patriot Act), as from timeto time may be reasonably requested by the Administrative Agent or such Lender; and(h) promptly following any request therefor, such other information regarding the operations, business affairs andfinancial condition of the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not in possession of theBorrower), or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender (through theAdministrative Agent) may reasonably request, provided, however, that the Parent shall not be required to provide pro forma financialstatements and information in connection with a Borrowing Request of $50,000,000 or less.Section 6.2. Notices of Material EventsThe Parent will furnish to the Administrative Agent prompt written notice of the following:(a) the occurrence of any Default;(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or GovernmentalAuthority against the Parent or any Affiliate that, in either case, would reasonably be expected to result in a Material Adverse Effect;(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred,would reasonably be expected to result in a Material Adverse Effect;(d) as soon as possible and in no event later than five (5) Business Days after the receipt thereof by the Parent, theBorrower or any Subsidiary (other than NMTC Subsidiaries), a copy of any notice, summons, citation or other written communicationconcerning any actual, alleged, suspected or threatened violation of any Environmental Law, or any Environmental Liability of theParent, the Borrower or any Subsidiary, in each case, which would reasonably be expected to have a Material Adverse Effect;(e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities ofany Loan Party pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished tothe Lenders pursuant to any other clause of this Section 6.2; and(f) any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.Each notice delivered under this Section (other than paragraph (e)) shall be accompanied by a statement of a Financial Officer or otherResponsible Officer of the Parent setting forth the details841821445.29\C072091\0303228of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.Section 6.3. Existence; Conduct of BusinessThe Parent will, and will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent notreasonably expected to result in a Material Adverse Effect) to, do or cause to be done all things reasonably necessary to preserve,renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to theconduct of its business, except, in each case, as otherwise permitted by Section 7.3.Section 6.4. Payment and Performance of ObligationsThe Parent will, and will cause each subsidiary thereof (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to, pay or perform (before the same shall become delinquent or in default) itsobligations, including Tax liabilities, that, if not paid or performed, would reasonably be expected to result in a Material AdverseEffect, except where (i) the validity or amount thereof is being contested in good faith by appropriate proceedings, (ii) the Parent orsuch subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (iii) the failure to makepayment pending such contest would not reasonably be expected to result in a Material Adverse Effect.Section 6.5. Maintenance of PropertiesThe Parent will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to, keep and maintain all tangible property material to the conduct of their businesses,taken as a whole, in good working order and condition, ordinary wear and tear (and damage caused by casualty) excepted.Section 6.6. Books and Records; Inspection RightsThe Parent will, and will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent notreasonably expected to result in a Material Adverse Effect) to, keep proper books of record and account in which full, true and correctentries are made of all dealings and transactions in relation to its business and activities. The Parent will, and will cause the Borrowerand each Subsidiary (other than NMTC Subsidiaries) to, permit any representatives designated by the Administrative Agent or anyLender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, andto discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times as reasonablyrequestedSection 6.7. Compliance with LawsThe Parent will, and will cause each subsidiary thereof to, (1) comply with all laws, rules, regulations and orders of anyGovernmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would notreasonably be expected to851821445.29\C072091\0303228result in a Material Adverse Effect and (1) maintain in effect and enforce policies and procedures designed to ensure compliance by theParent, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions.Section 6.8. Environmental ComplianceThe Parent will, and will cause each subsidiary thereof to, use and operate all of its facilities and property in compliancewith all Environmental Laws, keep all necessary permits, approvals, certificates, licenses and other authorizations relating toenvironmental matters in effect and remain in compliance therewith, and handle all Hazardous Materials in compliance with allapplicable Environmental Laws, except where noncompliance with any of the foregoing would not reasonably be expected to have aMaterial Adverse Effect.Section 6.9. InsuranceThe Parent will, and will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent notreasonably expected to result in a Material Adverse Effect) to, self‑insure or maintain, with financially sound and reputable insurancecompanies, (i) adequate insurance for its insurable properties, all to such extent and against such risks, including fire, casualty, businessinterruption and other risks insured against by extended coverage, as is customary with companies in the same or similar businessesoperating in the same or similar locations and (ii) such other insurance as is required pursuant to the terms of any Security Document.Section 6.10. Casualty and CondemnationThe Borrower will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or otherinsured damage to any property owned or held by or on behalf of the Borrower or any Subsidiary (other than NMTC Subsidiaries)with a fair market value immediately prior to such casualty or insured damage of at least $5,000,000, or the commencement of anyaction or proceeding for the taking of any property or interest therein with a fair market value immediately prior to such taking of atleast $5,000,000, under power of eminent domain or by condemnation or similar proceeding.Section 6.11. Additional SubsidiariesIf any Subsidiary (other than a NMTC Subsidiary or a subsidiary of an Excluded Subsidiary) is formed or acquiredafter the Fourth Restatement Closing Date (each a “New Subsidiary”), and remains a Subsidiary for not less than ten Business Days,not later than the tenth Business Day after the date on which such New Subsidiary is formed or acquired, the Borrower will (a) providewritten notice thereof, in reasonable detail, to the Administrative Agent, (b) designate in such notice whether such New Subsidiary isan “Excluded Subsidiary” (in which event such New Subsidiary shall be a “New Excluded Subsidiary”), provided that in the event theBorrower designates such New Subsidiary as not a New Excluded Subsidiary or fails to make any such designation, such NewSubsidiary shall irrevocably be deemed not to be an “Excluded Subsidiary” (in which event such New Subsidiary shall be a “NewIncluded Subsidiary”), (c) if such New Subsidiary is a New Included Subsidiary, (i) cause such New Subsidiary to execute and861821445.29\C072091\0303228deliver a completed Guarantee Supplement and become a party to each applicable Security Document in the manner provided therein,and (ii) promptly take or cause such New Subsidiary to take such actions to create and perfect Liens on such New Subsidiary’s assets(other than Excluded Collateral) to secure the Obligations as the Administrative Agent or the Lenders holding more than 50% of theTotal Credit Exposure of all Classes that are the beneficiaries of such Collateral, taken as a whole, shall reasonably request, and (d) ifany Equity Interests issued by such New Subsidiary are owned or held by or on behalf of the Borrower or any Subsidiary (other thanan Excluded Subsidiary) or any loans, advances or other debt is owed or owing by such New Subsidiary to the Borrower or anySubsidiary (other than an Excluded Subsidiary), the Borrower will cause such Equity Interests and promissory notes and otherinstruments evidencing such loans, advances and other debt to be pledged pursuant to the Security Documents.Section 6.12. Information Regarding Collateral.The Parent will furnish to the Administrative Agent prompt written notice of any change in (1) the legal name orjurisdiction of incorporation or formation of any Loan Party, (1) the location of the chief executive office of any Loan Party or itsprincipal place of business, (1) the identity or organizational structure of any Loan Party such that a filed financing statement becomesmisleading or (1) the Federal Taxpayer Identification Number or company organizational number of any Loan Party. The Parentagrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UniformCommercial Code or otherwise that are required in order for the Administrative Agent to continue at all times following such change tohave a valid, legal and perfected security interest in all the Collateral.Section 6.13. Further AssurancesThe Parent will, and will cause the Borrower and each Subsidiary Guarantor to, execute any and all further documents,mortgages, deeds of trust, financing statements, agreements (including guarantee agreements and security agreements) and instruments,and take all such further actions (including the filing and recording of financing statements and other documents), that theAdministrative Agent may reasonably request, to grant, preserve, protect or perfect (including as a result of any change in applicablelaw) Liens on all Collateral (other than Excluded Collateral) of the Borrower and each Subsidiary Guarantor, including the Lienscreated or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of theParent, the Borrower or any Subsidiary, and in that connection the Borrower will, and will cause each of its Subsidiaries to, grant tothe Administrative Agent security interests and Mortgages in all of its owned Real Property (except to the extent constituting ExcludedCollateral) acquired after the Fourth Restatement Closing Date and satisfy the Real Estate Collateral Requirement with respect to eachsuch Real Property within 90 days after the date such Real Property is so acquired. The Parent also agrees to provide to theAdministrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfectionand priority of the Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Loan Partieswill not be required to register any trademarks or copyrights.871821445.29\C072091\0303228Section 6.14. Use of Proceeds(a) The proceeds of the Loans and the Letters of Credit will be used only as follows: (i) to reimburse the Issuing Bankin respect of amounts drawn under Letters of Credit, (ii) to pay transaction fees and expenses and (iii) for general corporate purposesnot inconsistent with the terms hereof, including the making of Investments permitted by Section 7.4, Acquisitions permitted bySection 7.5 and Restricted Payments permitted by Section 7.8, provided that notwithstanding the foregoing, Term B Loans will beused first to finance the AWN Transaction, and to pay transaction fees and expenses related thereto and hereto, and second, to theextent of any excess, for general corporate purposes not inconsistent with the terms of this Agreement.(b) No part of the proceeds of any Loan or any Letter of Credit will be used, whether directly or indirectly, andwhether immediately, incidentally or ultimately, to (1) purchase, acquire or carry any Margin Stock, (1) for any purpose that entails aviolation of any of the regulations of the Board, including Regulations T, U and X, or (1) to make a loan to any director or executiveofficer of the Borrower or any Subsidiary. The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shallnot use, and the Borrower shall ensure that its Subsidiaries and its or their respective directors, officers and employees shall not use, theproceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the paymentor giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding,financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country or (iii) inany manner that would result in the violation of any Sanctions applicable to any party hereto.Section 6.15. Maintenance of RatingsUse commercially reasonable efforts to cause (1) each of S&P and Moody’s to maintain a rating for the Term B Loans,(1) Moody’s to maintain a corporate family rating (or the equivalent thereof), and (1) S&P to maintain a corporate credit rating (or theequivalent thereof), in each case with respect to the Borrower, it being understood, in each case, that such obligation shall not requirethe Borrower to maintain any specific rating.ARTICLE 7 NEGATIVE COVENANTSUntil the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees andother amounts payable hereunder (other than contingent or indemnification obligations not then due) shall have been paid in full incash and all Letters of Credit have expired (or have been cash collateralized or otherwise provided for in full in a manner reasonablysatisfactory to the Issuing Bank) and all LC Disbursements have been reimbursed, the Parent covenants and agrees with the CreditParties that:881821445.29\C072091\0303228Section 7.1. IndebtednessThe Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extentnot reasonably expected to result in a Material Adverse Effect) to, create, incur, assume or permit to exist any Indebtedness, excepteach of the following:(a) Indebtedness under the Loan Documents;(b) Indebtedness existing on the Fourth Restatement Closing Date and set forth in Schedule 7.1, and OtherRefinancing Indebtedness with respect thereto;(c) Indebtedness (i) of the Borrower owed to any Subsidiary Guarantor, (ii) of any Subsidiary Guarantor owed to theBorrower or any other Subsidiary Guarantor, and (iii) of any Excluded Subsidiary owed to any other Excluded Subsidiary;(d) Guarantees (i) by the Borrower of Indebtedness of any Subsidiary Guarantor, (ii) by any Subsidiary Guarantor ofIndebtedness of the Borrower or any other Subsidiary Guarantor, and (iii) by any Excluded Subsidiary of Indebtedness of theBorrower or any Subsidiary;(e) Indebtedness (whether secured or unsecured) of the Parent, the Borrower or any Subsidiary under HedgingAgreements permitted by Section 7.12;(f) unsecured Indebtedness of the Parent not in excess of $750,000,000 in aggregate principal amount in respect of theSenior Notes;(g) unsecured Indebtedness of the Parent that constitutes Other Replacement Debt in respect of the Senior Notes (theprincipal amount of which may be increased in the same transaction to the extent permitted by Section 7.1(p)), provided that (i) theOther Refinancing Condition shall have been satisfied, and (ii) immediately before and immediately after the incurrence thereof, noDefault shall or would exist;(h) Indebtedness (whether secured or unsecured) of Excluded Subsidiaries in an aggregate principal amount not toexceed $300,000,000 at any one time outstanding in connection with Permitted NMTC Transactions, provided that (i) immediatelybefore and immediately after the incurrence thereof, no Default shall or would exist, and (ii) all such Indebtedness incurred after theFourth Restatement Closing Date shall have a final stated maturity date that is no earlier than the Permitted Debt Maturity Date;(i) Indebtedness consisting of unsecured guaranties by the Borrower and/or the Subsidiary Guarantors of Indebtednesspermitted under Section 7.1(f), Section 7.1(g), or Section 7.1(p);(j) Indebtedness (whether secured or unsecured) of one or more of the Excluded Subsidiaries not in excess of$100,000,000 in aggregate principal amount at any one time outstanding, provided that (i) immediately before and immediately afterthe incurrence thereof, no Default shall or would exist, and (ii) all such Indebtedness incurred after the Fourth Restatement891821445.29\C072091\0303228Closing Date shall (X) be Approved Debt, or (Y) have a final stated maturity date that is no earlier than the Permitted Debt MaturityDate;(k) Indebtedness of a Person who becomes a Subsidiary in connection with an Acquisition permitted by Section 7.5(e)or assumed by the Borrower or any Subsidiary in connection with an Acquisition permitted by Section 7.5(e), provided that (i) suchIndebtedness is not incurred in contemplation of such Acquisition, and (ii) the aggregate principal amount of all such Indebtednessunder this Section 7.1(k) shall not exceed $25,000,000 at any one time outstanding;(l) Capital Lease Obligations pursuant to transponder leases in an aggregate principal amount not to exceed$80,000,000 at any one time outstanding, provided that immediately before and immediately after the incurrence thereof, no Defaultshall or would exist;(m) Capital Lease Obligations of the Borrower or any one or more of the Subsidiary Guarantors to any one or more ofthe Excluded Subsidiaries in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding, provided that (i)each such Capital Lease Obligation shall be on an “arm’s length” basis, and (ii) immediately before and immediately after giving effectto the incurrence of each such Capital Lease Obligation, no Default shall or would exist;(n) Capital Lease Obligations in an aggregate principal amount not to exceed $60,000,000 at any one timeoutstanding, provided that immediately before and immediately after the incurrence thereof, no Default shall or would exist;(o) Indebtedness (whether secured or unsecured) of the Parent, the Borrower or any of the Subsidiaries in an aggregateprincipal amount not to exceed $20,000,000 at any one time outstanding, provided that immediately before and immediately after theincurrence thereof, no Default shall or would exist;(p) unsecured Indebtedness of the Parent, the Borrower or any of the Subsidiaries, provided that (i) immediately beforeand immediately after the incurrence thereof, no Default shall or would exist, (ii) all such Indebtedness incurred after the FourthRestatement Closing Date shall have a final stated maturity date that is no earlier than the Existing Facility Maturity Date, (iii) unlessotherwise agreed to in writing by the Administrative Agent (the decision to be within the sole and absolute discretion of theAdministrative Agent), such Indebtedness (other than Indebtedness incurred by Excluded Subsidiaries) is on terms and conditions,taken as a whole, that are not materially more restrictive than those governing the Indebtedness incurred under the Loan Documents (ascertified by a Financial Officer pursuant to a certificate in form reasonably acceptable to the Administrative Agent, which certificateshall be conclusive as to compliance with this clause (iii)), and (iv) immediately after giving effect thereto, the Total Leverage Ratiowould not exceed 5.50:1.00;(q) Indebtedness of the Borrower and the Subsidiaries incurred after the Fourth Restatement Closing Date in respect ofInvestments made after the Fourth Restatement Closing Date and permitted by Section 7.4(h); and901821445.29\C072091\0303228(r) obligations of the Borrower or any of the Subsidiaries owed to the Borrower or any of the Subsidiaries underservices agreements for the provision of network capacity to the extent characterized as Capital Lease Obligations.Section 7.2. LiensThe Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extentnot reasonably expected to result in a Material Adverse Effect) to, create, incur, assume or permit to exist any Lien on any property orasset now owned or hereafter acquired by it, except:(a) Liens created under the Loan Documents;(b) Permitted Encumbrances;(c) any Lien on any property or asset of the Parent, the Borrower or any Subsidiary to the extent existing on the FourthRestatement Closing Date and set forth in Schedule 7.2, provided that (i) such Lien shall not apply to any other property or asset of theParent, the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the FourthRestatement Closing Date and any extensions, renewals and replacements thereof that do not increase the amount thereof;(d) (i) Liens to secure the Indebtedness permitted by Section 7.1(e), (l), (m), (n), (o) or (r) and (ii) Liens (other thanLiens on Collateral) to secure the Indebtedness permitted by Section 7.1(h) or (j);(e) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary orexisting on any property or asset of any Person that becomes a Subsidiary after the Fourth Restatement Closing Date prior to the timesuch Person became or becomes a Subsidiary, provided that (i) such Lien is not created in contemplation of or in connection with suchacquisition or such Person becoming a Subsidiary, as applicable, (ii) such Lien shall not apply to any other property or assets of theBorrower or any Subsidiary, and (iii) such Lien shall secure only the Indebtedness and other obligations that it secures on the date ofsuch acquisition or the date such Person becomes a Subsidiary, as applicable, and any Other Refinancing Indebtedness in respect ofsuch Indebtedness;(f) any encumbrance or restriction (including, without limitation, put and call agreements and transfer restrictions, butnot other Liens) with respect to the Equity Interest of any joint venture or similar arrangement created pursuant to the joint venture orsimilar agreements with respect to such joint venture or similar arrangement;(g) other Liens securing obligations in an aggregate amount not exceeding $5,000,000 at any one time outstanding;and(h) Liens on the assets and property of the Parent (other than any Lien on any Equity Interest issued by the Borrower).911821445.29\C072091\0303228Section 7.3. Fundamental Changes(a) The Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to theextent not reasonably expected to result in a Material Adverse Effect) to, merge into or consolidate with any other Person, or permitany other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series ofrelated transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired), or liquidate ordissolve, except that, provided that both immediately before and after giving effect thereto, no Event of Default shall or would exist:(i) the Parent may merge or consolidate with any Person, provided that (A) the Parent shall be the surviving entitythereof, (B) the Parent shall have satisfied the notice requirements in Section 6.1(e) with respect thereto, and (C) immediatelyafter giving effect thereto, the Loan Parties shall be in compliance on a pro forma basis with all Financial Covenants as of themost recent fiscal quarter end (assuming, for purposes of the Financial Covenants, that all mergers, acquisitions and dispositionsconsummated since the first day of such fiscal quarter, had occurred on the first day of such fiscal quarter);(ii) the Borrower may merge or consolidate with any Subsidiary Guarantor, provided that the Borrower shall be thesurviving entity;(iii) the Borrower may merge or consolidate with any other Person, provided that (A) the Borrower shall be thesurviving entity, (B) the Parent shall have satisfied the requirements in Section 6.1(e) with respect thereto, and (C) immediatelyafter giving effect thereto, the Loan Parties shall be in compliance on a pro forma basis with all Financial Covenants as of themost recent fiscal quarter end (assuming, for purposes of the Financial Covenants, that all mergers, acquisitions and dispositionsconsummated since the first day of such fiscal quarter, had occurred on the first day of such fiscal quarter);(iv) (A) any Subsidiary may merge or consolidate with or into the Borrower in a transaction in which the Borrower isthe surviving Person, (B) any Subsidiary Guarantor may merge or consolidate with or into any Subsidiary in a transaction inwhich a Subsidiary Guarantor is the surviving Person, and (C) any Excluded Subsidiary may merge or consolidate with or intoany other Subsidiary (including another Excluded Subsidiary) in a transaction in which such other Subsidiary is the survivingPerson;(v) any Subsidiary may merge or consolidate with any other Person, provided that (A) immediately after giving effectthereto, no Default shall or would exist, and (B) either (1)(a) such Subsidiary is the surviving Person, and (b) such merger orconsolidation is not prohibited by Section 7.5, or (2)(a) such other Person is the surviving Person, and (b)(i) such merger orconsolidation is not prohibited by Section 7.7, or (ii) such merger or consolidation is not prohibited by Section 7.5 and suchother Person shall become a Subsidiary Guarantor in accordance with Section 6.11;(vi) (A) the Parent may sell, transfer, lease or otherwise dispose of all or substantially all of its assets (other than EquityInterests in the Borrower) to any Person, (B)921821445.29\C072091\0303228the Borrower may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to any Subsidiary Guarantor,(C) any Subsidiary Guarantor may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to theBorrower or to any other Subsidiary Guarantor (upon voluntary liquidation or dissolution or otherwise), and (D) any ExcludedSubsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or any Subsidiary(upon voluntary liquidation or dissolution or otherwise);(vii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets in a transaction that is not otherwisepermitted by this Section 7.3(a), provided that such sale, transfer, lease or other disposition is permitted by Section 7.7; and(viii) any Subsidiary may liquidate, wind up or dissolve so long as (A) the assets of any such Subsidiary that is aSubsidiary Guarantor are transferred to the Borrower or another Subsidiary Guarantor, or (B) the assets of any such Subsidiarythat is an Excluded Subsidiary are transferred to the Borrower or a Subsidiary.(b) The Parent will not, and will not permit any subsidiary thereof (other than NMTC Subsidiaries to the extent notreasonably expected to result in a Material Adverse Effect) to, engage in any business other than businesses of the type conducted bythe Parent, the Borrower and the Subsidiaries on the Fourth Restatement Closing Date and businesses which are now, or which in thefuture shall have become, reasonably related thereto or a reasonable extension thereof.Section 7.4. InvestmentsThe Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to, purchase, hold or acquire (including pursuant to any merger) any Equity Interest,evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make orpermit to exist any loans or advances to, or make or permit to exist any Guarantee of any obligations of, any other Person (all of theforegoing, “Investments”), except:(a) Investments in Cash Equivalents;(b) Investments existing on the Fourth Restatement Closing Date and set forth on Schedule 7.4, and Investments inCoBank Equities;(c) Investments by any Person in existence at the time such Person becomes a Subsidiary, provided such Investmentwas not made in connection with or anticipation of such Person becoming a Subsidiary;(d) Investments permitted by Section 7.3 or 7.5;(e) Investments (i) made by the Borrower in any Subsidiary Guarantor, (ii) made by any Subsidiary Guarantor in theBorrower or any other Subsidiary Guarantor, or (iii) made by any Excluded Subsidiary in any other Excluded Subsidiary;931821445.29\C072091\0303228(f) loans, advances and Guarantees of Indebtedness permitted by Section 7.1;(g) Guarantees by the Borrower or any Subsidiary to the extent that, immediately before and immediately after givingeffect thereto (i) no Default shall or will exist, and (ii) no High Ratio Condition shall or would exist;(h) Investments (other than Guarantees) by the Borrower and the Subsidiaries to the extent that immediately beforeand immediately after giving effect thereto no Default shall or would exist, and(i) immediately before and immediately after giving effect thereto no High Ratio Condition shall or would exist, or(ii) immediately after giving effect thereto (1) the aggregate outstanding principal balance of all debt Investments madepursuant to this Section 7.4(h)(ii) since the Fourth Restatement Closing Date would not exceed $10,000,000, and (2) theaggregate amount of all other Investments made pursuant to this Section 7.4(h)(ii) since the Fourth Restatement Closing Datewould not exceed $10,000,000;(i) Investments under Hedging Agreements permitted hereunder;(j) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for any sale ofassets permitted under Section 7.7;(k) Investments arising out of the receipt by the Borrower or any Subsidiary of Restricted Payments permitted underSection 7.8;(l) the AWN Transaction, provided that immediately before and immediately after the consummation thereof no Eventof Default shall exist or would occur;(m) Investments pursuant to Permitted NMTC Transactions;(n) Investments received in connection with the bankruptcy or reorganization of suppliers and customers of theBorrower or any Subsidiary in settlement of obligations and disputes;(o) Investments in Excluded Subsidiaries to the extent funded with the proceeds of a concurrent distribution from oneor more Excluded Subsidiaries; and(p) loans and advances to employees in the ordinary course of business not in excess of $5,000,000 in aggregateprincipal amount outstanding at any one time.Section 7.5. AcquisitionsThe Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to (i) purchase or otherwise acquire (in any one transaction or any series of relatedtransactions and, including by merger, consolidation or otherwise) (1) all or substantially all of the property of any941821445.29\C072091\0303228Person or (2) any business or division of any Person, or (ii) cause any Person to become a subsidiary thereof (each of the transactionsdescribed in clauses (i) and (ii) immediately above, an “Acquisition”), except:(a) Acquisitions by (i) the Borrower from any Subsidiary Guarantor, and (ii) any Subsidiary Guarantor from theBorrower or any other Subsidiary;(b) Acquisitions by any Excluded Subsidiary from any other Excluded Subsidiary;(c) [reserved];(d) Persons may become NMTC Subsidiaries in connection with Permitted NMTC Transactions; and(e) other Acquisitions by the Borrower or any Subsidiary, if each of the following conditions is met:(i) immediately before and immediately after giving effect thereto no Default shall or would exist;(ii) immediately after giving effect thereto the Parent shall have satisfied the requirements in Section 6.1(e) with respectthereto, if any;(iii) the Board of Directors of the Person to be acquired shall not have indicated publicly its opposition to theconsummation of such transaction (which opposition has not been publicly withdrawn);(iv) all transactions in connection therewith shall be consummated in accordance with all applicable requirements oflaw (including, without limitation, all State Law and State Regulations);(v) with respect to any such transaction involving consideration to be paid by the Borrower and the Subsidiaries inexcess of $50,000,000, unless the Administrative Agent shall otherwise agree, the Parent shall have provided theAdministrative Agent and the Lenders with historical financial statements of the Person or business to be acquired to the extentavailable;(vi) immediately after giving effect thereto, the Loan Parties shall be in compliance on a pro forma basis with allFinancial Covenants as of the most recent fiscal quarter end (assuming, for purposes of the Financial Covenants, that allmergers, acquisitions and dispositions consummated since the first day of such fiscal quarter, had occurred on the first day ofsuch fiscal quarter); and(vii) (A) immediately before and immediately after giving effect to such transaction, no High Ratio Condition shall orwould exist, or (B) immediately after giving effect thereto, the aggregate consideration paid by the Borrower and theSubsidiaries951821445.29\C072091\0303228pursuant to this Section 7.5(e)(vii)(B) since the Fourth Restatement Closing Date would not exceed $10,000,000.Section 7.6. Sale and Lease-Back TransactionsThe Borrower will not, and will not permit any of the Subsidiaries (other than NMTC Subsidiaries to the extent notreasonably expected to result in a Material Adverse Effect) to, enter into any arrangement, directly or indirectly, with any Personwhereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired,and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as theproperty being sold or transferred, unless (a) the sale or transfer of such property is permitted by Section 7.7, and (b) any Liens arisingin connection with its use of such property are permitted by Section 7.2.Section 7.7. DispositionsThe Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to, sell, transfer, lease or otherwise dispose (including pursuant to a merger) of anyasset (other than cash and Cash Equivalents), including any Equity Interest, and the Borrower will not and will not permit anySubsidiary to, issue any Equity Interest, except:(a) (i) sales, transfers, leases and other dispositions of used or surplus equipment or other obsolete or, in the reasonablejudgment of Borrower, unnecessary assets, (ii) the licensing of intellectual property by the Borrower to any Subsidiary Guarantor, (iii)the substantially contemporaneous exchange of equipment by any Subsidiary for property of a like kind, to the extent that theequipment received by such Subsidiary in such exchange is of a value equivalent to the value of the equipment exchanged (provided,that after giving effect to such exchange, the value of the property subject to perfected first priority Liens in favor of the AdministrativeAgent under the Security Documents is not materially reduced), and (iv) the sale, transfer or other disposition of property and inventoryin the ordinary course of business;(b) sales, transfers, leases and other dispositions (i) made by the Borrower to any Subsidiary Guarantor, (ii) made byany Subsidiary to the Borrower or any Subsidiary Guarantor, and (iii) made by any Excluded Subsidiary to any other ExcludedSubsidiary;(c) Liens permitted by Section 7.2, sales, transfers, leases and other dispositions permitted by Section 7.3, Investmentspermitted by Section 7.4, sale and leaseback transactions permitted by Section 7.6, and Restricted Payments permitted by Section 7.8;(d) the sale, transfer, lease and other disposition or abandonment of intellectual property that is, in the reasonablejudgment of the Parent, no longer economically practicable to maintain or useful in the conduct of the business of the Borrower and theSubsidiary Guarantors taken as a whole;961821445.29\C072091\0303228(e) the sale or discount, in each case without recourse and in the ordinary course of business, of overdue accountsreceivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent withcustomary industry practice (and not part of any bulk sale or financing of receivables);(f) [reserved];(g) issuances of Equity Interests (i) by the Borrower to the Parent, (ii) by any Subsidiary to the Borrower or anySubsidiary Guarantor, and (iii) by any Excluded Subsidiary to the Borrower or any Subsidiary;(h) [reserved];(i) other issuances of Equity Interests by any Subsidiary to the extent arising out of (i) an Investment by the Borroweror any other Subsidiary permitted by Section 7.4, (ii) a sale, transfer or other disposition by the Borrower or any Subsidiary permittedby Section 7.7(j), or (iii) a Restricted Payment made by the Borrower or any Subsidiary permitted by Section 7.8;(j) other sales, transfers, leases and other dispositions of assets by the Borrower or any Subsidiary and issuances ofEquity Interests by a Subsidiary, if each of the following conditions is met:(i) immediately before and immediately after giving effect thereto, no Default shall exist or would occur;(ii) immediately after giving effect thereto, the Parent shall have satisfied the requirements in Section 6.1(e) withrespect thereto, if any;(iii) the aggregate consideration received by the Borrower and the Subsidiaries in connection therewith shall not beless than the fair market value of the property transferred by the Borrower and the Subsidiaries in connection therewith;(iv) the terms thereof shall be “arm’s length”; and(v) the fair market value of all property of the Borrower and the Subsidiaries sold, transferred, leased or otherwisedisposed of, and Equity Interests issued, pursuant to this Section 7.7(j) would not exceed (A) $50,000,000 in any one fiscalyear, or (B) $100,000,000 in the aggregate since the Fourth Restatement Closing Date; and(k) sales, transfers, leases and other dispositions of real estate owned by the Borrower or any Subsidiary as of theFourth Restatement Closing Date or Towers in a sale and lease‑back transaction to the extent that the incurrence of Indebtedness andLiens with respect to such transaction are permitted by Section 7.1 and Section 7.2.971821445.29\C072091\0303228Section 7.8. Restricted PaymentsThe Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to, declare or make, or agree to pay for or make, directly or indirectly, any RestrictedPayment, except:(a) the Borrower may declare and pay dividends and other distributions with respect to its Equity Interests payablesolely in perpetual common Equity Interests;(b) (i) any Subsidiary may declare and make Restricted Payments to the Borrower or any Subsidiary Guarantor, and(ii) any Excluded Subsidiary may declare and pay Restricted Payments to the Borrower or any Subsidiary;(c) any Subsidiary that is not a wholly-owned Subsidiary may declare and pay cash dividends to its equity holdersgenerally so long as the Borrower (or a Subsidiary thereof which owns the equity interests in the Subsidiary paying such dividend)receives at least its proportional share thereof (based upon its relative holding of the equity interests in the Subsidiary paying suchdividend and taking into account the relative preferences, if any, of the various classes of Equity Interests issued by such Subsidiary);(d) the Borrower or any Subsidiary may declare and pay Restricted Payments to the Parent in cash, provided that (i)the Parent shall use the proceeds of each such Restricted Payment to pay a regularly scheduled cash payment of interest onindebtedness permitted by Section 7.1(f), Section 7.1(g) or Section 7.1(p), (ii) no such Restricted Payment shall be made before thedate that is 30 days prior to the due date (without giving effect to any grace period) of such regularly scheduled cash interest payment,(iii) no such Restricted Payment shall, when aggregated with all other Restricted Payments made pursuant to this Section 7.8(d) withrespect to any such regularly scheduled cash interest payment, exceed the amount of such regularly scheduled cash interest payment,and (iv) immediately before and immediately after giving effect thereto, no Default shall or would exist;(e) the Borrower may declare and pay Restricted Payments in cash to the Parent in an amount that, during any fiscalyear, would not exceed the portion of the income taxes payable by the Parent in such fiscal year attributable to the Borrower and itsSubsidiaries;(f) [reserved]; and(g) the Borrower or any Subsidiary may declare and pay other Restricted Payments in cash, provided that (i)immediately before and immediately after giving effect thereto no Default shall or would exist, and (ii)(A) immediately before and aftergiving effect thereto no High Ratio Condition shall or would exist, or (B) immediately after giving effect thereto, the amount of allRestricted Payments made pursuant to this Section 7.8(g)(ii)(B) would not exceed $5,000,000 in the aggregate since the FourthRestatement Closing Date.981821445.29\C072091\0303228Section 7.9. PrepaymentsThe Parent will not, and will not allow any subsidiary thereof to, (a) prepay any interest owing under the Senior Notesor Other Replacement Debt, other than in connection with the prepayment of such Indebtedness with Other Refinancing Indebtedness,or (b) voluntarily prepay any principal in respect of the Senior Notes or Other Replacement Debt, other than in connection with theprepayment of such Indebtedness with Other Refinancing Indebtedness.Section 7.10. Transactions with AffiliatesThe Parent will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to, sell, transfer, lease or otherwise dispose of (including pursuant to a merger) anyproperty or assets to, or purchase, lease or otherwise acquire (including pursuant to a merger) any property or assets from, or otherwiseengage in any other transactions with, any Affiliate thereof, except (a) as set forth on Schedule 7.10, (b) for general corporate servicesin the ordinary course of business, including the provision of insurance, (c) transactions between the Borrower and any SubsidiaryGuarantor, between Subsidiary Guarantors or between Excluded Subsidiaries, (d) transactions between any Loan Party and anyExcluded Subsidiary at prices and on terms and conditions not less favorable to such Loan Party than could be obtained on an “arm’slength” basis from unrelated third parties, and (e) transactions that are in the ordinary course of business at prices and on terms andconditions not less favorable to the Borrower or such Subsidiary than could be obtained on an “arm’s length” basis from unrelated thirdparties, provided that this Section shall not apply to (x) any Restricted Payment made by the Borrower to the Parent to the extentpermitted under Section 7.8, (y) any transaction between or among the Borrower and/or any Subsidiary (and not involving any otherAffiliate) to the extent permitted under Sections 7.1, 7.3, 7.4, 7.5, 7.6, 7.7, or 7.8, or (z) the guaranties permitted under Section 7.1(i).Section 7.11. Restrictive AgreementsThe Parent will not, and will not permit the Borrower or any Subsidiary Guarantor to, directly or indirectly, enter into,incur or permit to exist any agreement or other arrangement binding on the Borrower or such Subsidiary Guarantor that prohibits,restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary Guarantor to create, incur or permit to existany Lien (other than Liens prohibited under any cable television Franchise agreement relating to the Borrower or any SubsidiaryGuarantor) upon any of its property or assets (unless such agreement or arrangement does not prohibit, restrict or impose any conditionupon the ability of any Loan Party to create, incur or permit to exist any Lien in favor of the Secured Parties created under the LoanDocuments), or (b) the ability of any Subsidiary Guarantor to pay dividends or make other distributions with respect to any of itsEquity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary Guarantor or to GuaranteeIndebtedness of the Borrower or any Subsidiary Guarantor, provided that (i) the foregoing shall not apply to restrictions and conditionsimposed by law or by the Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereofidentified on Schedule 7.11 (but shall apply to any amendment or modification expanding the scope of any such restriction orcondition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating991821445.29\C072091\0303228to the sale of a Subsidiary or all or substantially all of its assets pending such sale, provided that such restrictions and conditions applyonly to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) the foregoing shall not apply to restrictions orconditions imposed on any Person that becomes a Subsidiary after the Fourth Restatement Closing Date, provided that (1) suchrestrictions and conditions exist at the time such Person becomes a Subsidiary and is not created in contemplation of or in connectionwith such Person becoming a Subsidiary, and (2) so long as any such restriction or condition exists, such Person shall be an ExcludedSubsidiary, (v) clause (a) of this Section shall not apply to restrictions or conditions imposed by any agreement relating to securedIndebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing suchIndebtedness, and (vi) clause (a) of this Section shall not apply to customary provisions in agreements restricting the assignment ofsuch agreements.Section 7.12. Hedging AgreementsThe Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect) to, enter into any Hedging Agreement, other than Hedging Agreements to hedge ormitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its liabilities.Section 7.13. Amendment of Material DocumentsThe Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extentnot reasonably expected to result in a Material Adverse Effect) to, amend, supplement or otherwise modify, or waive any of its rightsunder its certificate of formation, operating agreement or other organizational documents, in each case other than amendments,modifications or waivers that would not reasonably be expected to adversely affect the Credit Parties, provided that the Parent shalldeliver or cause to be delivered to the Administrative Agent a copy of each such amendment, modification or waiver promptly after theexecution and delivery thereof.Section 7.14. Ownership of SubsidiariesThe Parent shall at all times own, directly or indirectly, 100% of the issued and outstanding Equity Interests of theBorrower and each Subsidiary other than Excluded Subsidiaries. No Excluded Subsidiary may own, directly or indirectly, any EquityInterest issued by any Subsidiary Guarantor.Section 7.15. Sanctions; Anti-Corruption LawsThe Parent will not, and will not permit the Borrower or any Subsidiary to, directly or indirectly, use the proceeds ofany Borrowing, or lend, contribute or otherwise make available such proceeds to any joint venture partner or other individual or entity,to fund any activities of or business with any individual or entity, or in any Sanctioned Country, that, at the time of such funding, is thesubject of Sanctions, or in any other manner that will result in a violation by any individual1001821445.29\C072091\0303228or entity (including any individual or entity participating in the transaction, whether as Lender, Arranger, Administrative Agent, L/CIssuer, Swing Line Lender, or otherwise) of Sanctions.Section 7.16. Interest Coverage RatioThe Parent will not permit the Interest Coverage Ratio to be less than 2.50:1.00 at any time.Section 7.17. Total Leverage RatioThe Parent will not permit the Total Leverage Ratio to be greater than 5.95:1.00 at any time.Section 7.18. Senior Leverage RatioThe Parent will not permit the Senior Leverage Ratio to be greater than 3.00:1.00 at any time.ARTICLE 8 EVENTS OF DEFAULTIf any of the following events (each an “Event of Default”) shall occur:(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of anyLC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed forprepayment thereof or otherwise;(b) the Borrower shall fail to pay any interest on any Loan or on any reimbursement obligation in respect of anyLC Disbursement or any fee, commission or any other amount (other than an amount referred to in paragraph (a) of this Article)payable under any Loan Document, when and as the same shall become due and payable, and such failure shall continue unremediedfor a period of five Business Days;(c) any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection withany Loan Document or any amendment or modification thereof or waiver thereunder, or in any certificate furnished pursuant to or inconnection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have beenincorrect in any material respect when made or deemed made;(d) (i) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any SecurityDocument, in each case to the extent it is a party thereto, and such failure shall continue unremedied for a period of 10 days after theearlier to occur of (1) the receipt by such Loan Party of written notice thereof from the Administrative Agent or any Lender, or (2) aResponsible Officer of such Loan Party obtaining actual knowledge thereof, or (ii) any Loan Party shall fail to observe or perform anycovenant, condition or agreement contained in Section 6.3, 6.8, 6.12, 6.13, or 6.14 or in Article 7, or in Article 11, provided that adefault under1011821445.29\C072091\0303228the Financial Covenants shall not constitute an Event of Default with respect to any Non‑Financial Covenant Facility unless and untilthe Lenders holding more than 50% of the Financial Covenant Credit Exposures of all Lenders shall have accelerated the maturity ofany Loan (other than a Loan under a Non‑Financial Covenant Facility) outstanding;(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any LoanDocument to which it is a party (other than those specified in paragraph (a), (b) or (d) of this Article), and such failure shall continueunremedied for a period of 30 days after a Responsible Officer shall have obtained actual knowledge thereof;(f) the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected toresult in a Material Adverse Effect) shall fail to make any payment (whether of principal or interest, and regardless of amount) inrespect of any Material Obligations when and as the same shall become due and payable (after giving effect to any applicable graceperiod);(g) any event or condition occurs that results in any Material Obligations becoming due prior to their scheduledmaturity or payment date, or that enables or permits the holder or holders of any Material Obligations or any trustee or agent on its ortheir behalf to cause any Material Obligations to become due prior to their scheduled maturity or payment date or to require theprepayment, repurchase, redemption or defeasance thereof, prior to their scheduled maturity (in each case after (x) the giving of anyapplicable notice and (y) giving effect to any applicable grace period), provided that this paragraph (g) shall not apply to (i) MaterialObligations owed by any Excluded Subsidiary that constitutes an Unrestricted Subsidiary (as defined in the indenture for any of theSenior Notes), (ii) secured Indebtedness that becomes due solely as a result of the voluntary sale, transfer or other disposition of theproperty or assets securing such Indebtedness, or (iii) Material Obligations owed by NMTC Subsidiaries to the extent not reasonablyexpected to result in a Material Adverse Effect;(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation,reorganization or other relief in respect of the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent notreasonably expected to result in a Material Adverse Effect), or its debts, or of a substantial part of its assets, under any Federal, state orforeign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee,custodian, sequestrator, conservator or similar official for the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries tothe extent not reasonably expected to result in a Material Adverse Effect) or for a substantial part of its assets, and, in any such case,such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoingshall be entered;(i) the Parent, the Borrower or Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected toresult in a Material Adverse Effect) shall (i) voluntarily commence any proceeding or file any petition seeking liquidation,reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter ineffect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described inparagraph (h) of this Article, (iii) apply for or1021821445.29\C072091\0303228consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Parent, the Borrower orany Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect), or for asubstantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v)make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;(j) the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected toresult in a Material Adverse Effect) shall become unable, admit in writing its inability or fail generally to pay its debts as they becomedue;(k) one or more judgments for the payment of money in an aggregate amount in excess of $50,000,000 shall berendered against the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected toresult in a Material Adverse Effect), or any combination thereof (to the extent not fully covered by insurance without taking intoaccount any applicable deductibles) and the same shall remain undischarged or unbonded for a period of 60 consecutive days duringwhich execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon anyassets of the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in aMaterial Adverse Effect) to enforce any such judgment;(l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred andare continuing, would reasonably be expected to result in a Material Adverse Effect;(m) any Loan Document shall cease, for any reason, to be in full force and effect (other than pursuant to the termshereof or thereof), or any Loan Party shall so assert in writing;(o) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any LoanParty in writing not to be, a valid and, except to the extent otherwise permitted by the applicable Security Document, perfected Lien onany Collateral, with the priority required by the applicable Security Document, except (i) as a result of the sale or other disposition ofthe applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent’s failure tomaintain possession of any stock certificates, promissory notes or other instruments delivered to it under any Security Document or anyforeclosure, distraint, sale or similar proceedings have been commenced with respect to any Collateral;(p) one or more Authorizations of the Borrower or any Subsidiary to own or operate all or any portion of theCommunications Business is not renewed, expires, or is terminated, suspended or revoked, and such nonrenewal, expiration,termination, suspension or revocation would reasonably be expected to have a Material Adverse Effect; or(q) a Change in Control shall have occurred;1031821445.29\C072091\0303228then, and in every such event (other than an event described in paragraph (h) or (i) of this Article with respect to the Borrower), and atany time thereafter during the continuance of such event, the Administrative Agent may, and at the request of Lenders holding morethan 50% of the Total Credit Exposure of all Classes affected thereby, taken as a whole, shall, by notice to the Borrower, take either orboth of the following actions, at the same or different times: (i) except for Commitments for which no Event of Default has occurredterminate the Commitments, and thereupon such Commitments shall terminate immediately and (ii) except for Loans for which noEvent of Default has occurred, declare the Loans then outstanding to be due and payable in whole (or in part, in which case anyprincipal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of suchLoans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of each Loan Partywith respect thereto accrued under the Loan Documents, shall become due and payable immediately, without presentment, demand,protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to theBorrower described in paragraph (h) or (i) of this Article, such Commitments shall automatically terminate and the principal of theLoans then outstanding, together with accrued interest thereon and all fees and other obligations of each Loan Party accrued under theLoan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all ofwhich are hereby waived by the Borrower and the Guarantors.ARTICLE 9 THE ADMINISTRATIVE AGENTEach Credit Party hereby irrevocably appoints the Administrative Agent as its agent and authorizes the AdministrativeAgent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof,together with such actions and powers as are reasonably incidental thereto.The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as aLender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such Person and itsAffiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiaryor other Affiliate thereof as if it were not the Administrative Agent hereunder.The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Withoutlimiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties,regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take anydiscretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the LoanDocuments that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number orpercentage of the Credit Parties as shall be necessary under the circumstances as provided in Section 10.2 or otherwise in thisAgreement), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not beliable for the failure to disclose, any information relating to1041821445.29\C072091\0303228the Borrower, any of the Subsidiaries or any Loan Party that is communicated to or obtained by the Person serving as AdministrativeAgent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it withthe consent or at the request of the Required Lenders (or such other number or percentage of the Credit Parties as shall be necessaryunder the circumstances as provided in Section 10.2 or otherwise in this Agreement) or in the absence of its own gross negligence orwillful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written noticethereof is given to the Administrative Agent by the Parent, the Borrower or a Credit Party (and, promptly after its receipt of any suchnotice, it shall give each Credit Party and the Borrower notice thereof), and the Administrative Agent shall not be responsible for orhave any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any LoanDocument, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) theperformance or observance of any of the covenants, agreements or other terms or conditions set forth therein, (iv) the validity,enforceability, effectiveness or genuineness thereof or any other agreement, instrument or other document or (v) the satisfaction of anycondition set forth in Article 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to theAdministrative Agent.The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice,request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed orsent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believedby it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult withlegal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not beliable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any oneor more sub-agents appointed by the Administrative Agent, provided that no such delegation shall serve as a release of theAdministrative Agent or waiver by any Loan Party of any rights hereunder. The Administrative Agent and any such sub-agent mayperform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions ofthe preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent.Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, theAdministrative Agent may resign at any time by notifying the Credit Parties and the Borrower. Upon any such resignation, theRequired Lenders shall have the right, with the consent of the Borrower (which consent shall not be unreasonably withheld,conditioned or delayed), unless an Event of Default shall have occurred and be continuing, in which case no consent of the Borrowershall be required, to appoint a successor from among the Lenders reasonably acceptable to the Borrower. If no successor shall havebeen so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring AdministrativeAgent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Credit Parties, appoint a successorAdministrative Agent reasonably acceptable to the Borrower (which1051821445.29\C072091\0303228consent shall not be unreasonably withheld, conditioned or delayed), unless an Event of Default shall have occurred and be continuing,in which case no consent of the Borrower shall be required, from among the Lenders or an Affiliate of any such Lender with minimumcapital and undivided surplus of not less than $500,000,000. Upon the acceptance of its appointment as Administrative Agenthereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of theretiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. Thefees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unlessotherwise agreed in writing between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, theprovisions of this Article and Section 10.3 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agentsand their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting asAdministrative Agent.Each Credit Party acknowledges that it has, independently and without reliance upon the Administrative Agent or anyother Credit Party or any of their Affiliates and based on such documents and information as it has deemed appropriate, made its owncredit analysis and decision to enter into this Agreement. Each Credit Party also acknowledges that it will, independently and withoutreliance upon the Administrative Agent or any other Credit Party or any of their Affiliates and based on such documents andinformation as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under orbased upon any Loan Document, any related agreement or any document furnished thereunder.Notwithstanding anything in any Loan Document to the contrary, no Agent (other than the Administrative Agent) orArranger, in each case acting in such capacity, shall have any duty or obligation under the Loan Documents.Each Lender and the Issuing Bank irrevocably authorizes the Administrative Agent, at its option and in its discretion (i)to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (A) upon termination ofthe Commitments and payment in full of all Obligations (other than contingent or indemnification obligations not then due) and theexpiration, termination or cash collateralization of all Letters of Credit, (B) that is sold or otherwise transferred or to be sold orotherwise transferred as part of or in connection with any sale or other transfer permitted under the Loan Documents, or (C) ifapproved, authorized or ratified in writing by the Required Lenders; and (ii) to release any Subsidiary from its obligations under theLoan Documents if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by theAdministrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release itsinterest in particular types or items of property, or to release any Loan Party from its obligations under the Loan Documents pursuant tothis Section.The use of a Platform in connection with this Agreement or any other Loan Document is provided “as is” and “asavailable.” The Agents do not warrant the accuracy or completeness of any electronic communications made on the Platform, or theadequacy of the Platform and expressly disclaim liability for errors or omissions in such electronic communications. No warranty ofany1061821445.29\C072091\0303228kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by any Agent in connection with suchelectronic communications or the Platform.ARTICLE 10 MISCELLANEOUSSection 10.1. NoticesExcept in the case of notices and other communications expressly permitted to be given by telephone (and subject to thelast paragraph of this Section 10.1), all notices and other communications provided for herein shall be in writing and shall be deliveredby hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:(a) if to any Loan Party, to it at 2550 Denali Street, Suite 1000, Anchorage, Alaska 99503, Attention of ChiefFinancial Officer (Facsimile No. (907) 868-5676), with a copy to Steven D. Miller, Esq., Sherman & Howard L.L.C., 633 17th Street,Suite 3000, Denver, Colorado 80202, Facsimile No. (303) 298-0940;(b) if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to it at 1301 Avenue of the Americas,New York, New York 10019-6022, Attention of: Media & Communications Group (Facsimile No. (212) 261-3288), with a copy toBryan Cave, LLP, 1290 Avenue of the Americas, New York, New York 10104, Attention of Matthew P. D’Amico, Esq. (TelephoneNo. (212) 541-1270, Facsimile No. (212) 904-0502); and(c) if to any other Credit Party, to it at its address (or facsimile number) set forth in its Administrative Questionnaire.Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the otherparties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreementshall be deemed to have been given on the date of receipt.Documents required to be delivered pursuant to Section 6.1 and 6.2 may be delivered by e-mail or facsimile. Promptly after receiptthereof by the Administrative Agent, the Administrative Agent shall post such documents electronically with notice of such posting toeach Lender and if so posted, shall be deemed to have been delivered on the date on which such documents are posted on the Platform,if any, to which each Lender has access (whether a commercial, third‑party website or whether sponsored by the AdministrativeAgent). The Administrative Agent’s obligation to deliver information pursuant to this Section 10.1 may be discharged by posting suchinformation on the Platform in accordance with the remaining provisions of this paragraph. The Loan Parties hereby acknowledge that(i) the Administrative Agent will make available to the Lenders on a confidential basis materials and/or information provided by or onbehalf of the Parent and the Borrower hereunder (collectively, “Materials”) by posting the Materials on the Platform and (ii) certain ofthe Lenders1071821445.29\C072091\0303228may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Parent orany subsidiary thereof) (each, a “Public Lender”). The Parent shall mark Materials that the Parent intends to be made available toPublic Lenders clearly and conspicuously as “PUBLIC.” By designating Materials as “PUBLIC,” the Parent authorizes such Materialsto be made available to a portion of the Platform designated “Public Investor,” which is intended to contain only information that iseither publicly available or not material information (though it may be sensitive and proprietary) with respect to such Person or itssecurities for purposes of United States Federal and State securities laws. Any Materials not marked “PUBLIC” shall be treated as if itcontains material non-public information with respect to the Parent and the subsidiaries thereof or their securities. Notwithstanding theforegoing, the Parent is under no obligation to mark any Materials as “PUBLIC.”Section 10.2. Waivers; Amendments(a) No failure or delay by any Credit Party in exercising any right or power under any Loan Document shall operate asa waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps toenforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights andremedies of the Credit Parties under the Loan Documents are cumulative and are not exclusive of any rights or remedies that theywould otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefromshall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consentshall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, themaking of a Loan or the issuance, amendment, extension or renewal of a Letter of Credit shall not be construed as a waiver of anyDefault, regardless of whether any Credit Party may have had notice or knowledge of such Default at the time.(b) Except as provided in Section 2.1(c) and Section 2.1(d) with respect to Add‑on Term Loans, Section 2.5(d) withrespect to additional Revolving Commitments, Section 2.13 with respect to Incremental Term Loans, Section 2.14 with respect toRefinancing Revolving Loans and Refinancing Term Loans and Section 2.15 with respect to Extended Revolving Loans andExtended Term Loans, neither any Loan Document nor any provision thereof may be waived, amended or modified except pursuant toan agreement or agreements in writing entered into by the Parent, the Borrower, the Subsidiary Guarantors and the Required Lendersor by the Parent, the Borrower, the Subsidiary Guarantors and the Administrative Agent with the consent of the Required Lenders,provided that no such agreement shall (i) increase any Commitment of any Lender without the written consent of such Lender, (ii)reduce the principal amount of any Loan or any reimbursement obligation with respect to an LC Disbursement, or reduce the rate ofany interest thereon (other than any waiver of default interest payable pursuant to Section 3.1(b)), or reduce any fees payablehereunder, without the written consent of each Credit Party directly and adversely affected thereby, (iii) postpone any scheduledprincipal payment date (other than mandatory prepayments) or postpone any other payment at stated maturity of any Loan or the dateof payment of any reimbursement obligation with respect to an LC Disbursement, any interest (other than any waiver of defaultinterest) or any fees payable hereunder, or reduce (other than any waiver of default interest) the amount of, or waive or excuse anysuch payment, without the written consent of each1081821445.29\C072091\0303228Credit Party directly and adversely affected thereby, (iv) change any provision hereof in a manner that would alter the pro rata sharingof payments required by Section 2.11(b), the application of mandatory prepayments required by Section 2.7, the application ofpayments under Section 2.11(b), or the pro rata reduction of Commitments required by Section 2.5(c), without the written consent ofeach Credit Party directly and adversely affected thereby, provided that, no consent of a Lender shall be required under this clause (iv)if, contemporaneously with the effectiveness of such amendment, the Commitments of such Lender are terminated, and all principaland interest on such Lender’s Loans and all fees and other amounts payable to such Lender hereunder (other than contingent orindemnification obligations not then due) are paid in full, (v) change any of the provisions of this Section or reduce the number orpercentage set forth in the definition of the term “Required Lenders” or in any other provision hereof specifying the number orpercentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consenthereunder, without the written consent of each Lender in the group of Lenders to which such number or percentage applies (it beingunderstood that an amendment shall not be deemed to change such provisions to the extent it effects an increase or decrease in thecommitment of any Lender(s) or in the aggregate amount of the commitments of any Class), (vi) release the Parent or any SubsidiaryGuarantor from its Guarantee hereunder (except as expressly provided herein or in the Security Documents), or limit its liability inrespect of such Guarantee, without the written consent of each Lender that is a beneficiary of such Guarantee, (vii) release all orsubstantially all of the Collateral from the Liens of the Loan Documents, without the written consent of each Lender that is abeneficiary of such Collateral, or (viii) expressly change or waive any condition precedent in Section 5.2 to any Revolving Borrowingunder a Revolving Facility without the written consent of the Majority Facility Lenders with respect to such Revolving Facility; andprovided, further, that, notwithstanding the above provision of this Section 10.2(b), (A) no such agreement shall amend, modify orotherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the priorwritten consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as applicable, (B) any waiver, amendment ormodification of this Agreement that by its terms affects one or more Classes of Lenders (but not of all Classes of Lenders) may beeffected by an agreement or agreements in writing entered into by the Parent, the Borrower, the Subsidiary Guarantors and the Lendersholding the requisite percentage in interest of Total Credit Exposures of all affected Classes, taken as a whole, and (C) any waiver,amendment or modification with respect to a Financial Covenant or any amendment or modification of a defined term used in aFinancial Covenant to the extent such defined term is utilized solely for purposes of calculating such Financial Covenant shall requirethe consent only of the Borrower and the Lenders holding more than 50% of the Total Credit Exposures of all Classes subject to suchFinancial Covenant, taken as a whole.(c) In connection with any proposed amendment, modification, waiver or termination (a “Proposed Change”)requiring the consent of all Lenders (or all Lenders of one or more affected Classes of Lenders), if the consent of the Required Lenders(or the consent of Lenders of the affected Classes holding more than 50% of the Total Credit Exposures of all Lenders of such Classes,taken as a whole) to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent isrequired is not obtained (any such Lender whose consent is so required but not so obtained being referred to as a “Non-ConsentingLender”), then, so long as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower1091821445.29\C072091\0303228may, at its sole expense and effort, upon notice to such Non-Consenting Lenders and the Administrative Agent, require each of theNon-Consenting Lenders to assign and delegate, without recourse (in accordance with and subject to the restrictions contained inSection 10.4), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (whichassignee may be another Lender, if a Lender accepts such assignment) and that shall consent to the Proposed Change, provided that (a)the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Revolving Commitment is beingassigned, the Issuing Bank and the Swingline Lender), which consent(s) shall not unreasonably be withheld, conditioned or delayed,(b) each Non-Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans andparticipations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder from theassignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts)and (c) the Borrower or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified inSection 10.4(b).(d) Notwithstanding anything to the contrary contained in this Section, this Agreement may be amended (or amendedand restated) with the written consent of the Required Lenders, the Administrative Agent, the Borrower, the Parent and the SubsidiaryGuarantors (a) to add one or more additional credit facilities to this Agreement (it being understood that no Lender shall have anyobligation to provide or to commit to provide all or any portion of any such additional credit facility) and to permit the extensions ofcredit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of thisAgreement and the other Loan Documents with the Loans and the accrued interest and fees in respect thereof and (b) to includeappropriately the Lenders holding such credit facilities in any determination of the Required Lenders.(e) Further, notwithstanding anything to the contrary contained in this Section, if within sixty (60) days following theFourth Restatement Closing Date, the Administrative Agent and the Borrower shall have jointly identified an obvious error or anyerror or omission of a technical or immaterial nature, in each case, in any provision of any of the Loan Documents, then theAdministrative Agent (acting in its sole discretion) and the Borrower shall be permitted to amend such provision and such amendmentshall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to inwriting by the Required Lenders within five Business Days following receipt of notice thereof.(f) Any Lender may authorize the Administrative Agent to sign any amendment, modification or waiver hereto in anyauthorization form agreed to by the Borrower and the Administrative Agent and no Lender shall be entitled to see any other Lender’sauthorization form.Section 10.3. Expenses; Indemnity; Damage Waiver(a) The Borrower shall pay (i) all reasonable out-of-pocket costs and expenses incurred by the Administrative Agentand its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent in connection withthe preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions of any LoanDocument, (ii) all reasonable out-of-pocket costs and expenses incurred by the Issuing1101821445.29\C072091\0303228Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for paymentthereunder, and (iii) all out-of-pocket costs and expenses incurred by any Credit Party, including the reasonable fees, charges anddisbursements of Counsel, in connection with the enforcement or protection of its rights in connection with the Loan Documentsduring the continuation of an Event of Default, including its rights under this Section, or in connection with the Loans made or Lettersof Credit issued hereunder, including all such out-of-pocket costs and expenses incurred during any workout, restructuring ornegotiation in respect of such Loans or Letters of Credit. For purposes of this Section 10.3, “Counsel” means (X) in connection with(1) any workout, restructuring or similar negotiation with respect to the Obligations, (2) any Event of Default arising from a failure bythe Borrower to pay the principal of, or interest on, any Loan or LC Disbursement when due, (3) any acceleration of the Loans, and/or(4) any filing or proceeding referred to in paragraph (h) or (i) of Article 8, counsel for each Credit Party, or (Y) in all other events, (i)any counsel for the Credit Parties, and (ii) if a conflict exists, reasonably necessary additional counsel for the affected Credit Parties.(b) The Borrower shall indemnify each Arranger, each Credit Party and each Related Party of each Arranger and eachCredit Party (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,claims, damages, liabilities and related expenses, including the reasonable fees, charges and disbursements of counsel for theIndemnitees (unless a conflict exists, in which case, reasonable fees, charges and disbursements of reasonably necessary additionalcounsel for the affected Indemnitees shall be covered), but excluding Taxes which are governed by Section 3.7, incurred by or assertedagainst any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or anyagreement or instrument contemplated thereby, the performance by the parties to the Loan Documents of their respective obligationsthereunder or the consummation of the Transactions or any other transactions contemplated thereby, (ii) any Loan or Letter of Credit orthe use of the proceeds thereof including any refusal of the Issuing Bank to honor a demand for payment under a Letter of Credit if thedocuments presented in connection with such demand do not strictly comply with the terms of such Letter of Credit, (iii) any actual oralleged presence or release of Hazardous Materials on or from any property owned or operated by the Parent, the Borrower or any ofthe Subsidiaries, or any Environmental Liability related in any way to the Parent, the Borrower or any of the Subsidiaries or (iv) anyother actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tortor any other theory and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to anyIndemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court ofcompetent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconductof such Indemnitee or, in the case of clause (iv) immediately above, to have resulted from a material breach of the obligations of suchIndemnitee under the Loan Documents. Each Indemnitee shall endeavor to give prompt notice to the Borrower of any claim againstsuch Indemnitee that may give rise to an indemnification claim against the Borrower under this Section 10.3, provided however thatsuch Indemnitee shall have no liability to the Borrower for such the failure to give any such notice.1111821445.29\C072091\0303228(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent underparagraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent an amount equal to the product ofsuch unpaid amount multiplied by a fraction, the numerator of which is such Lender’s Total Credit Exposure and the denominator ofwhich is the aggregate Total Credit Exposure of all Lenders (in each case determined as of the time that the applicable unreimbursedexpense or indemnity payment is sought or, in the event that no Lender shall have any Total Credit Exposure at such time, as of the lasttime at which any Lender had a Total Credit Exposure), provided that the unreimbursed expense or indemnified loss, claim, damage,liability or related expense, as applicable, was incurred by or asserted against the Administrative Agent in its capacity as such. To theextent that the Borrower fails to pay any amount required to be paid by it to the Issuing Bank or the Swingline Lender under paragraph(a) or (b) of this Section, each Revolving Lender severally agrees to pay to the Issuing Bank or the Swingline Lender, as applicable, anamount equal to the product of such unpaid amount multiplied by a fraction, the numerator of which is such Revolving Lender’sRevolving Credit Exposure plus the unused portion of its Revolving Commitment and the denominator of which is the aggregateRevolving Credit Exposure of all Lenders plus the aggregate unused amount of all Revolving Commitments (in each case determinedas of the time that the applicable unreimbursed expense or indemnity payment is sought or, in the event that no Revolving Lender shallhave any Revolving Credit Exposure or unused Revolving Commitment at such time, as of the last time at which any RevolvingLender had any Revolving Credit Exposure or unused Revolving Commitment), provided that the unreimbursed expense orindemnified loss, claim, damage, liability or related expense, as applicable, was incurred by or asserted against the Issuing Bank or theSwingline Lender, as the case may be, in its capacity as such.(d) To the extent permitted by applicable law, no Loan Party shall assert, and each Loan Party hereby waives, anyclaim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to directand actual damages) arising out of, in connection with, or as a result of, any Loan Document or any agreement, instrument or otherdocument contemplated thereby, the Transactions or any Loan or any Letter of Credit or the use of the proceeds thereof.(e) All amounts due under this Section shall be payable promptly but in no event later than ten Business Days afterwritten demand therefor.Section 10.4. Successors and Assigns(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefitof the parties hereto and their respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwisetransfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and noLender may assign or otherwise transfer any of its rights or obligations hereunder except (1) to an assignee in accordance with theprovisions of paragraph (b) of this Section, (1) by way of participation in accordance with the provisions of paragraph (d) of thisSection or (1) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and anyother attempted assignment or transfer by any party hereto shall be null and void).1121821445.29\C072091\0303228Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, theirrespective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to theextent expressly contemplated hereby, the Related Parties of each Credit Party) any legal or equitable right, remedy or claim under orby reason of this Agreement.(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rightsand obligations under this Agreement (including all or a portion of its Commitments and the Loans and obligations in respect of its LCExposure and Swingline Exposure at the time owing to it); provided that any such assignment shall be subject to the followingconditions:(i) Minimum Amounts.(A) in the case of an assignment of the entire remaining amount of the assigning Lender’sCommitments and the Loans and obligations in respect of its LC Exposure and Swingline Exposure at the time owing to it or in thecase of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and(B) in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of theCommitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, theprincipal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date theAssignment and Acceptance with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specifiedin the Assignment and Acceptance, as of the Trade Date) shall not be less than $2,000,000, in the case of any assignment in respect ofa revolving facility, or $1,000,000, in the case of any assignment in respect of a term facility, unless the Administrative Agent consents(such consent not to be unreasonably withheld or delayed) and, so long as no Event of Default has occurred and is continuing, theBorrower consents (in its sole discretion).(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all theassigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, exceptthat this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among such Loansor Commitments on a non‑pro rata basis.(iii) Required Consents. No consent shall be required for any assignment except to the extent required by paragraph(b)(i)(B) of this Section and, in addition:(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall berequired unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to aLender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any suchassignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having receivednotice thereof;1131821445.29\C072091\0303228(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed)shall be required for assignments in respect of (i) an unfunded or revolving facility if such assignment is to a Person that is not a Lenderwith a Commitment in respect of such facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) afunded term facility to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; and(C) the consent of the Issuing Bank (such consent not to be unreasonably withheld or delayed) shall berequired for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit(whether or not then outstanding) and the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall berequired for any assignment in respect of the revolving facility.(iv) Assignment and Acceptance. The parties to each assignment shall execute and deliver to the Administrative Agentan Assignment and Acceptance, together with a processing and recordation fee of $3,500, and the assignee, if it is not aLender, shall deliver to the Administrative Agent an Administrative Questionnaire, provided that assignments made by any Co-Lead Arranger or its Affiliate in connection with the initial syndication of the Term B Loans shall not be subject to suchrecordation fee.(v) No Assignment to Certain Parties. No such assignment shall be made to any Loan Party, any of its subsidiaries orany of their respective Affiliates.(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, fromand after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreementand, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under thisAgreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, bereleased from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigningLender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled tothe benefits of Sections 3.5, 3.6, 3.7 and 10.3 with respect to claims arising from facts and circumstances occurring prior to theeffective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does notcomply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rightsand obligations in accordance with paragraph (d) of this Section.(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain atone of its offices in New York, New York a copy of each Assignment and Acceptance delivered to it and a register for the recordationof the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lenderpursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, theAdministrative Agent and the Lenders may treat each Person1141821445.29\C072091\0303228whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender (with respect toits own interest only), at any reasonable time and from time to time upon reasonable prior notice.(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or theAdministrative Agent, sell participations to any Person (other than a natural person, any Loan Party, any of its subsidiaries or any oftheir respective Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement(including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under thisAgreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance ofsuch obligations and (iii) the Borrower, the Administrative Agent and each Credit Party shall continue to deal solely and directly withsuch Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant towhich a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and toapprove any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument mayprovide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described inthe first proviso in Section 10.2(b) that directly affects such Participant. Subject to paragraph (e) of this Section, the Borrower agreesthat each Participant shall be entitled to the benefits of Sections 3.5, 3.6 and 3.7 to the same extent as if it were a Lender and hadacquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shallbe entitled to the benefits of Section 10.8 as though it were a Lender, provided such Participant agrees to be subject to Section 2.11(c)as though it were a Lender.(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment underSections 3.5 or 3.7 than the applicable Lender would have been entitled to receive with respect to the participation sold to suchParticipant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant thatwould be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.7 unless the Borrower is notified of theparticipation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.7(e) and (f)as though it were a Lender.(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rightsunder this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a FederalReserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substituteany such pledgee or assignee for such Lender as a party hereto.Section 10.5. SurvivalAll covenants, agreements, representations and warranties made by the Loan Parties herein and in the certificates orother instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall beconsidered to have been relied1151821445.29\C072091\0303228upon by the other parties hereto and shall survive the execution and delivery of any Loan Document and the making of any Loans andthe issuance of any Letter of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstandingthat any Credit Party may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit isextended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or anyLC Disbursement or any fee or any other amount payable under the Loan Documents is outstanding and unpaid (other than contingentor indemnification obligations not then due) or any Letter of Credit is outstanding and so long as the Commitments have not expired orterminated. The provisions of Sections 3.5, 3.6, 3.7 and 10.3, 10.9, 10.10 and Article 9 shall survive and remain in full force and effectregardless of the consummation of the transactions contemplated hereby, the repayment of the Loans and the LC Disbursements, theexpiration or termination of the Letters of Credit and the termination of the Commitments or the termination of this Agreement or anyprovision hereof.Section 10.6. Counterparts; Integration; EffectivenessThis Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each ofwhich shall constitute an original, but all of which, when taken together, shall constitute a single contract. This Agreement and anyseparate letter agreements with respect to fees payable to any Credit Party constitute the entire contract among the parties relating to thesubject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matterhereof. Delivery of an executed counterpart of this Agreement by facsimile transmission or electronic photocopy (i.e., “pdf”) shall beeffective as delivery of a manually executed counterpart of this Agreement.Section 10.7. SeverabilityIn the event any one or more of the provisions contained in this Agreement should be held invalid, illegal orunenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any waybe affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not inand of itself affect the validity of such provision in any other jurisdiction).Section 10.8. Right of SetoffIf an Event of Default under Section 8(a) or (f) shall have occurred and be continuing, each of the Lenders and theirrespective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to setoffand apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at anytime owing by it to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now orhereafter existing under this Agreement held by it, irrespective of whether or not it shall have made any demand under this Agreementand although such obligations may be unmatured. Each Lender and Affiliate agrees to notify the Borrower and the AdministrativeAgent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of suchsetoff and application. The rights of each of the Lenders and1161821445.29\C072091\0303228their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that it mayhave.Section 10.9. Governing Law; Waiver of Jury TrialTHIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THISAGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THELAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULDREQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLELAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY ORINDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHERLOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEYOF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR, TO ITS KNOWLEDGE, OTHERWISE, THAT SUCHOTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERAND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTOTHIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHERTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.Section 10.10. Submission To Jurisdiction; WaiversEach party hereto hereby irrevocably and unconditionally:(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other LoanDocuments to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive generaljurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellatecourts from any thereof;(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it maynow or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought inan inconvenient court and agrees not to plead or claim the same;(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof byregistered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth in Section 10.1 or atsuch other address of which the Administrative Agent shall have been notified pursuant thereto;(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law orshall limit the right to sue in any other jurisdiction; and1171821445.29\C072091\0303228(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal actionor proceeding referred to in this Section any special, exemplary, punitive or consequential damages.Section 10.11. HeadingsArticle and Section headings and the Table of Contents used herein are for convenience of reference only, are not partof this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.Section 10.12. Interest Rate LimitationNotwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with allfees, charges and other amounts that are treated as interest on such Loan under applicable law (collectively the “charges”), shall exceedthe maximum lawful rate (the “maximum rate”) that may be contracted for, charged, taken, received or reserved by the Lender holdingsuch Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all of thecharges payable in respect thereof, shall be limited to the maximum rate and, to the extent lawful, the interest and the charges thatwould have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated,and the interest and the charges payable to such Lender in respect of other Loans or periods shall be increased (but not above themaximum rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date ofrepayment, shall have been received by such Lender.Section 10.13. Patriot ActEach Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalfof any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56(signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies theBorrower, which information includes the name, address and tax identification number of the Borrower and other informationregarding the Borrower that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordancewith the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Lenders andthe Administrative Agent.Section 10.14. Confidentiality(a) Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of theInformation (as defined below), except that Information may be disclosed (i) to its and its Affiliates’ directors, officers, employees andagents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is madewill be informed of the confidential nature of such Information and instructed to keep such Information confidential and the disclosingparty will be responsible for any disclosure by such Persons), (ii) to the extent requested by any regulatory authority (including anyself-1181821445.29\C072091\0303228regulatory authority having supervisory jurisdiction over such Person), (iii) to the extent required by applicable laws or regulations orby any subpoena or similar legal process, (iv) to any other party to this Agreement, (v) in connection with the exercise of any remedieshereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rightshereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) anyassignee under Section 10.4 or pledgee under Section 10.4(f) of or Participant in (or trustee for such assignee, pledge or Participant), orany prospective assignee under Section 10.4 or pledgee under Section 10.4(f) of or Participant in (or trustee for such assignee, pledgeor Participant), any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) toany swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower or (viii) to theextent such Information (A) becomes publicly available other than as a result of a breach of this Section or an agreement described inclause (vi) above or (B) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basisfrom a source other than the Borrower and the known Affiliates and representatives thereof (other than a source actually known bysuch disclosing Person to be bound by confidentiality obligations with respect thereof). For the purposes of this Section, “Information”means all information received from or on behalf of the Borrower relating to the Borrower, any Loan Party or any of their Affiliates ortheir respective businesses, other than any such information that is available to the Administrative Agent, Issuing Bank or Lender on anon-confidential basis prior to disclosure by or on behalf of the Borrower (other than from a source actually known by such party to bebound by confidentiality obligations). Any Person required to maintain the confidentiality of Information as provided in this Sectionshall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain theconfidentiality of such Information as such Person would accord to its own confidential information.(b) EACH LENDER ACKNOWLEDGES THAT CONFIDENTIAL INFORMATION AS DEFINED INSECTION 10.14 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLICINFORMATION CONCERNING THE LOAN PARTIES AND THEIR AFFILIATES OR THEIR RESPECTIVE SECURITIES,AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIALNON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION INACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATESECURITIES LAWS.(c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHEDBY THE LOAN PARTIES OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OFADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAINMATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE OTHER LOAN PARTIES AND THEIRAFFILIATES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THEBORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVEQUESTIONNAIRE DELIVERED TO THE ADMINISTRATIVE AGENT A CREDIT CONTACT WHO MAY RECEIVEINFORMATION1191821445.29\C072091\0303228THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCEPROCEDURES AND APPLICABLE LAW.Section 10.15. Amendment and RestatementThe parties to this Credit Agreement agree that, effective upon the Fourth Restatement Closing Date, the terms andprovisions of the Existing Credit Agreement shall be amended, superseded, restated and consolidated in their entirety without a breachin continuity by the terms and provisions of this Credit Agreement and, unless expressly stated to the contrary, each reference to theExisting Credit Agreement in any of the Loan Documents or any other document, instrument or agreement delivered in connectiontherewith shall mean and be a reference to this Credit Agreement. This Credit Agreement is not intended to and shall not constitute anovation of the Existing Credit Agreement or the obligations and liabilities thereunder.Section 10.16. No Fiduciary DutyEach Loan Party agrees that in connection with all aspects of the transactions contemplated hereby and anycommunications in connection therewith, such Loan Party and its Affiliates, on the one hand, and the Administrative Agent, each LeadArranger, the Documentation Agent, the Syndication Agent, the other Credit Parties and their respective Affiliates, on the other hand,will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the AdministrativeAgent, any Arranger, the Documentation Agent, the Syndication Agent, the other Credit Parties or their respective Affiliates and nosuch duty will be deemed to have arisen in connection with any such transactions or communications.Section 10.17. Savings Clause(a) Each of the Guarantees set forth herein and each Security Document each to the extent amended as providedherein, shall remain in full force and effect and continue to secure the Obligations.(b) Nothing in this Agreement shall affect the rights of the Credit Parties to payments under Articles 3 and 11 for theperiod prior to the Fourth Restatement Date and such rights shall continue to be governed by the provisions of the Existing CreditAgreement.ARTICLE 11 GUARANTEESection 11.1. Guarantee; Fraudulent Transfer, Etc.; Contribution(a) Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as aprimary obligor and not merely as a surety, the Obligations (other than Obligations which constitute Excluded Swap Obligations).Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or1201821445.29\C072091\0303228further assent from it and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation.(b) Guarantee of Payment. Each Guarantor further agrees that its guarantee hereunder constitutes a guarantee ofpayment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or anyother Secured Party to any of the security held for payment of the Obligations or to any balance of any deposit account or credit on thebooks of the Administrative Agent or any other Secured Party in favor of the Borrower or any other Person.(c) Fraudulent Transfer. Anything in this Article 11 to the contrary notwithstanding, (i) the obligations of eachSubsidiary Guarantor hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not rendersuch Subsidiary Guarantor’s obligations hereunder subject to avoidance as a fraudulent transfer, obligation or conveyance underSection 548 of Title 11 of the United States Code or any provisions of applicable state law (collectively, the “Fraudulent TransferLaws”), in each case after giving effect to all other liabilities of such Subsidiary Guarantor, contingent or otherwise, that are relevantunder the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such Subsidiary Guarantor (A) in respect ofintercompany debt owed or owing to the Parent or Affiliates of the Parent to the extent that such debt would be discharged in anamount equal to the amount paid by such Subsidiary Guarantor hereunder and (B) under any Guarantee of senior unsecured debt orIndebtedness subordinated in right of payment to the Obligations, which Guarantee contains a limitation as to maximum amount similarto that set forth in this clause (i), pursuant to which the liability of such Subsidiary Guarantor hereunder is included in the liabilitiestaken into account in determining such maximum amount) and after giving effect as assets to the value (as determined under theapplicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, contribution, reimbursement, indemnity or similarrights of such Subsidiary Guarantor pursuant to (I) applicable law or (II) any agreement providing for an equitable allocation amongsuch Subsidiary Guarantor and other Affiliates of the Borrower of obligations arising under guarantees by such parties (including theagreements described in Section 11.1(d)) and (ii) the Parent expressly subordinates any and all rights of subrogation, reimbursement,indemnity, exoneration, contribution or any other claim that it may now or hereafter have against the Borrower, any other Loan Party,any other guarantor or any other Person directly or contingently liable for the Obligations, or against or with respect to the property ofthe Borrower, such other Loan Party, such other guarantor or such other Person, arising from the existence or performance hereof,including, but not limited to, in the event that any money or property shall be transferred to any Credit Party by the Parent pursuant tothis Article 11 in reduction of the Obligations or otherwise.(d) Contributions. In addition to all rights of indemnity and subrogation the Subsidiary Guarantors may have underapplicable law (but subject to this paragraph), the Borrower agrees that (i) in the event a payment shall be made by any SubsidiaryGuarantor hereunder, the Borrower shall indemnify such Subsidiary Guarantor for the full amount of such payment, and suchSubsidiary Guarantor shall be subrogated to the rights of the person to whom such payments shall have been made to the extent ofsuch payment, and (ii) in the event that any assets of any Subsidiary Guarantor shall be sold pursuant to any Loan Document to satisfyany claim of any Secured Party,1211821445.29\C072091\0303228the Borrower shall indemnify such Subsidiary Guarantor in an amount equal to the greater of the book value or the fair market value ofthe assets so sold. Each Subsidiary Guarantor (a “Contributing Subsidiary Guarantor”) agrees (subject to this paragraph) that, in theevent a payment shall be made by any other Subsidiary Guarantor hereunder or assets of any other Subsidiary Guarantor shall be soldpursuant to any Loan Document to satisfy a claim of any Secured Party and such other Subsidiary Guarantor (the “ClaimingSubsidiary Guarantor”) shall not have been fully indemnified by the Borrower as provided in this paragraph, the ContributingSubsidiary Guarantor shall indemnify the Claiming Subsidiary Guarantor in an amount equal to the amount of such payment or thegreater of the book value or the fair market value of such assets, as applicable, in each case multiplied by a fraction of which thenumerator shall be the net worth of the Contributing Subsidiary Guarantor on the date hereof and the denominator shall be theaggregate net worth of all the Subsidiary Guarantors on the date hereof (or, in the case of any Subsidiary Guarantor becoming a partyhereto pursuant to Section 11.9, the date of the Guarantee Supplement executed and delivered by such Subsidiary Guarantor). AnyContributing Subsidiary Guarantor making any payment to a Claiming Subsidiary Guarantor pursuant to this paragraph shall besubrogated to the rights of such Claiming Subsidiary Guarantor under this paragraph to the extent of such payment. Notwithstandingany provision of this paragraph to the contrary, all rights of the Subsidiary Guarantors under this paragraph and all other rights ofindemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the payment in full in cash ofthe Obligations. No failure on the part of the Borrower or any Subsidiary Guarantor to make the payments required by this paragraph(or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of anySubsidiary Guarantor with respect to its obligations under this paragraph, and each Subsidiary Guarantor shall remain liable for the fullamount of the obligations of such Subsidiary Guarantor under this paragraph.Section 11.2. Obligations Not WaivedTo the fullest extent permitted by applicable law, each Guarantor waives presentment to, demand of payment from, andprotest to any Loan Party of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest fornonpayment. To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (i)the failure of the Administrative Agent or any other Secured Party to assert any claim or demand or to enforce or exercise any right orremedy against the Borrower or any other Guarantor under the provisions of this Agreement or any other Loan Document, orotherwise, (ii) any rescission, waiver, amendment or modification of, or any release from, any of the terms or provisions of thisArticle 11, any other Loan Document, any Guarantee or any other agreement, including with respect to any other Guarantor under thisArticle 11, (iii) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of theAdministrative Agent or any other Secured Party, or (iv) any other circumstance that would constitute a surety defense (other thanpayment in full in cash of all of the Obligations).Section 11.3. SecurityEach Guarantor authorizes the Administrative Agent and each other Secured Party to (i) take and hold security for thepayment of the obligations under the provisions of this Article 111221821445.29\C072091\0303228pursuant to the Security Documents and exchange, enforce, waive and release any such security, (ii) apply such security and direct theorder or manner of sale thereof in accordance with the Loan Documents and (iii) release or substitute any one or more endorsees, otherGuarantors or other obligors.Section 11.4. No Discharge or Diminishment of GuaranteeThe obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or terminationfor any reason (other than the payment in full in cash of the Obligations), including any claim of waiver, release, surrender, alterationor compromise of any of the Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or terminationwhatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality ofthe foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure ofthe Administrative Agent or any other Secured Party to assert any claim or demand or to enforce any remedy under this Agreement,any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default,failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or omission that may or might in anymanner or to any extent vary the risk of any Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter oflaw or equity (other than the payment in full in cash of all the Obligations).Section 11.5. Defenses of Borrower WaivedTo the fullest extent permitted by applicable law, each of the Guarantors waives any defense based on or arising out ofany defense of the Borrower or any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, orthe cessation from any cause of the liability of the Borrower or any other Loan Party, other than the payment in full in cash of theObligations. The Administrative Agent and the other Secured Parties may, at their election, foreclose on any security held by one ormore of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromiseor adjust any part of the Obligations, make any other accommodation with the Borrower or any Guarantor or exercise any other rightor remedy available to them against the Borrower or any Guarantor, without affecting or impairing in any way the liability of anyGuarantor hereunder except to the extent the Obligations have been fully paid in cash. Pursuant to applicable law, each Guarantorwaives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or toextinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any otherGuarantor, as applicable, or any security.Section 11.6. Agreement to Pay; SubordinationIn furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any otherSecured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Partyto pay any Obligation (other than Excluded Swap Obligations) when and as the same shall become due, whether at maturity, byacceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will1231821445.29\C072091\0303228forthwith pay, or cause to be paid, to the Administrative Agent or such other Secured Party as designated thereby in cash the amount ofsuch unpaid Obligations. Upon payment by any Guarantor of any sums to the Administrative Agent or any Secured Party as providedabove, all rights of such Guarantor against the applicable Loan Party arising as a result thereof by way of right of subrogation,contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the priorpayment in full in cash of the Obligations. In addition, any debt or Lien of the Borrower or any other Loan Party now or hereafter heldby any Guarantor is hereby subordinated in right of payment and priority to the prior payment in full in cash of the Obligations and theLiens created under the Loan Documents (provided that, payments on such debt may be made at any time when no Event of Defaulthas occurred and is continuing). If any amount shall erroneously be paid to any Guarantor on account of (i) such subrogation,contribution, reimbursement, indemnity or similar right or (ii) any such debt of the Borrower or such other Loan Party, such amountshall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Administrative Agent to be credited againstthe payment of the Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents.Section 11.7. InformationEach Guarantor assumes all responsibility for being and keeping itself informed of each Loan Party’s financialcondition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope andextent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the otherSecured Parties will have any duty to advise any of the Guarantors of information known to it or any of them regarding suchcircumstances or risks.Section 11.8. Termination(a) The guarantees made hereunder (i) shall terminate when all the Obligations have been paid in full in cash, allLetters of Credit have expired and all LC Disbursements have been reimbursed, and the Lenders have no further commitment to lendor otherwise extend credit under this Agreement and (ii) shall continue to be effective or be reinstated, as applicable, if at any timepayment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by any Secured Party or any Guarantorupon the bankruptcy or reorganization of any Loan Party or otherwise.(b) If any Equity Interest in any Subsidiary Guarantor is sold, transferred or otherwise disposed of pursuant to atransaction permitted by the Loan Documents and, immediately after giving effect thereto, such Subsidiary Guarantor shall no longerbe a Subsidiary, then the obligations of such Subsidiary Guarantor under this Article 11 shall be automatically released.Section 11.9. Additional GuarantorsUpon execution and delivery after the date hereof by the Administrative Agent and a Subsidiary of a GuaranteeSupplement, such Subsidiary shall become a Subsidiary Guarantor hereunder with the same force and effect as if originally named as aSubsidiary Guarantor herein. The execution and delivery of any Guarantee Supplement shall not require the consent of any other1241821445.29\C072091\0303228Loan Party. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition ofany new Subsidiary Guarantor as a party to this Agreement.Section 11.10. KeepwellEach Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes toprovide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its Guaranteeobligations under this Article 11 in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only beliable under this Section 11.10 for the maximum amount of such liability that can be hereby incurred without rendering its obligationsunder this Section 11.10, or its Guarantee obligations under this Article 11, voidable under applicable law relating to fraudulentconveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under thisSection shall remain in full force and effect until such Qualified ECP Guarantor’s obligations under this Article 11 terminate pursuantto Section 11.8. Each Qualified ECP Guarantor intends that this Section 11.10 constitute, and this Section 11.10 shall be deemed toconstitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.[the remainder of this page has been intentionally left blank]1251821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTIN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorizedofficers as of the day and year first above written.GCI HOLDINGS, INC.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance GCI, INC.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance ALASKA UNITED FIBER SYSTEM PARTNERSHIPBy: GCI Holdings, Inc., its general partnerBy: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, FinanceBy: GCI Communication Corp., its general partnerBy: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, FinanceTHE ALASKA WIRELESS NETWORK, LLCBy: /s/ Bruce L. Broquet Name: Bruce L. BroquetTitle: Chief Financial OfficerS-11821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTCYCLE30, INC.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance DENALI MEDIA HOLDINGS, CORP.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance GCI CABLE, INC.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance GCI COMMUNICATION CORP.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance GCI FIBER COMMUNICATION CO., INC.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance S-21821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTGCI NADC LLCBy: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance GCI SADC LLCBy: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance GCI WIRELESS HOLDINGS, LLCBy: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance INTEGRATED LOGIC LLCBy: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance POTTER VIEW DEVELOPMENT CO., INC.By: /s/ Thomas C. Chesterman Name: Thomas C. Chesterman Title: Vice President, Finance S-31821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTCREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender, theSwingline Lender, the Issuing Bank, and the Administrative AgentBy: /s/ Tanya CrossleyName: Tanya CrossleyTitle: Managing DirectorBy: /s/ Kestrina BudinaName: Kestrina BudinaTitle: DirectorS-41821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTSUNTRUST BANK, as Co—Syndication Agent and as a LenderBy: /s/ Marshall T. Mangum, IIIName: Marshall T. Mangum, IIITitle: DirectorS-51821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTBANK OF AMERICA, N.A., as Documentation Agent and as a LenderBy: /s/ Gordon H. GrayName: Gordon H. GrayTitle: Senior Vice PresidentS-61821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTMUFG UNION BANK, N.A., (f/k/a UNION BANK, N.A.) as Co—SyndicationAgent and as a LenderBy: /s/ David HillName: David HillTitle: Vice PresidentS-71821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTCOBANK, ACB, as a LenderBy: /s/ Ted KoernerName: Ted KoernerTitle: Managing DirectorS-81821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTDEUTSCHE BANK TRUST COMPANY AMERICAS, as a LenderBy: /s/ Anca TrifanName: Anca TrifanTitle: Managing DirectorBy: /s/ Peter CuochiaraName: Peter CuochiaraTitle: Vice PresidentS-91821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTROYAL BANK OF CANADA, as a LenderBy: /s/ Edward ValderramaName: Edward ValderramaTitle: Authorized SignatoryS-101821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTWELLS FARGO BANK, N.A., as a LenderBy: /s/ Chris CliffordName: Chris CliffordTitle: Vice PresidentS-111821445.29\C072091\0303228GCI HOLDINGS CREDIT AGREEMENTNORTHRIM BANK, as a LenderBy: /s/ Steven L. HartungName: Steven L. HartungTitle: EVPS-121821445.29\C072091\0303228Exhibit 21.1SUBSIDIARIES OF THE REGISTRANTEntityJurisdiction ofOrganizationName Under Which Subsidiary Does BusinessAlaska United Fiber System PartnershipAlaskaAlaska United Fiber System Partnership, AlaskaUnited Fiber System, Alaska UnitedGCI Communication Corp.AlaskaGCI, GCC, GCICC, GCI Communication Corp.GCI, Inc.AlaskaGCI, GCI, Inc.GCI Cable, Inc.AlaskaGCI Cable, GCI Cable, Inc.GCI Holdings, Inc.AlaskaGCI Holdings, Inc.Potter View Development Co., Inc.AlaskaPotter View Development Co., Inc.GCI Fiber Communication, Co., Inc.AlaskaGCI Fiber Communication, Co., Inc., GFCC, KanasCycle30, Inc.AlaskaCycle30, Inc., Cycle30GCI Wireless Holdings, LLCAlaskaGCI Wireless Holdings, LLCThe Alaska Wireless Network, LLCDelawareThe Alaska Wireless Network, AWNDenali Media Holdings, Corp.AlaskaDenali Media Holdings, Corp.Denali Media Anchorage, Corp.AlaskaDenali Media Anchorage, Corp.Denali Media Juneau, Corp.AlaskaDenali Media Juneau, Corp.Denali Media Southeast, Corp.AlaskaDenali Media Southeast, Corp.GCI Community Development, LLCAlaskaGCI Community Development, LLCIntegrated Logic, LLCAlaskaGCI, Integrated LogicGCI NADC, LLCAlaskaGCI, GCI NADC, LLCGCI SADC, LLCAlaskaGCI, GCI SADC, LLCUnicom, Inc.AlaskaUnicom, Inc., UnicomUnited-KUC, Inc.AlaskaUnited-KUC, Inc., United-KUC, KUCUnited Utilities, Inc.AlaskaUnited Utilities, Inc. United Utilities, UUIUnited2, LLCAlaskaUnited2, LLC, United2Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe have issued our reports dated March 5, 2015, with respect to the consolidated financial statements and internal control over financial reportingincluded in the Annual Report of General Communication, Inc. on Form 10-K for the year ended December 31, 2014. We hereby consent to theincorporation by reference of said reports in the Registration Statements of General Communication, Inc. on Forms S-8 (File Nos. 33-60728, 333-08760, 333-66877, 333-45054, 333-106453, 333-152857, 33-60222, 333-08758, 333-08762, 333-87639, 333-59796, 333-99003, 333-117783, 333-144916, 333-165878, and 333-188434)./s/ GRANT THORNTON LLPAnchorage, AlaskaMarch 5, 2015Exhibit 31.1SECTION 302 CERTIFICATIONI, Ronald A. Duncan, certify that:1.I have reviewed this annual report on Form 10-K of General Communication, Inc. for the period ended December 31, 2014;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periodcovered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.March 5, 2015/s/ Ronald A. Duncan Ronald A. DuncanPresident and DirectorExhibit 31.2SECTION 302 CERTIFICATIONI, Peter J. Pounds, certify that:1.I have reviewed this annual report on Form 10-K of General Communication, Inc. for the period ended December 31, 2014;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periodcovered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.March 5, 2015/s/ Peter J. Pounds Peter J. Pounds Senior Vice President, Chief Financial Officer, and Secretary (Principal Financial Officer)Exhibit 32.1CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACTOF 2002In connection with the Annual Report of General Communication, Inc. (the "Company") on Form 10-K for the period ended December 31, 2014 asfiled with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ronald A. Duncan, Chief Executive Officer of theCompany, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany.Date: March 5, 2015/s/ Ronald A. Duncan Ronald A. DuncanChief Executive OfficerGeneral Communication, Inc.Exhibit 32.2CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACTOF 2002In connection with the Annual Report of General Communication, Inc. (the "Company") on Form 10-K for the period ended December 31, 2014 asfiled with the Securities and Exchange Commission on the date hereof (the "Report"), I, Peter J. Pounds, Chief Financial Officer of the Company,certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany.Date: March 5, 2015/s/ Peter J. Pounds Peter J. PoundsChief Financial OfficerGeneral Communication, Inc.

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