AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER

Dated as of May 25, 2007
by and among

CT COMMUNICATIONS, INC.,

WINDSTREAM MARLIN, INC.

AND

WINDSTREAM CORPORATION

TABLE OF CONTENTS

				Page
ARTICLE 1 DEFINITIONS AND INTERPRETATION					2
Section 1.1		Definitions			2
Section 1.2		Interpretation			7
ARTICLE 2 MERGER AND ORGANIZATION					8
Section 2.1		The Merger			8
Section 2.2		Effective Time			9
Section 2.3		Effect of Merger			9
ARTICLE 3 CONVERSION OF SECURITIES AT THE EFFECTIVE TIME					10
Section 3.1		Conversion of Securities of the Company and Merger Sub			10
Section 3.2		Payment of Cash for Company’s Common Stock			11
Section 3.3		Exchange of Merger Sub Common Stock Certificate			13
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY					13
Section 4.1		Organization and Good Standing			13
Section 4.2		Authorization; Binding Agreement			14
Section 4.3		Capitalization			14
Section 4.4		Financial Statements; No Undisclosed Material Liabilities			16
Section 4.5		Absence of Certain Changes or Events			16
Section 4.6		SEC Reports and Other Documents			17
Section 4.7		Governmental Consents and Approvals			17
Section 4.8		No Violation			18
Section 4.9		Legal Proceedings			19
Section 4.10		Governmental Authorizations; Compliance with Law			19
Section 4.11		Brokers and Finders			20
Section 4.12		Fairness Opinion and Approval by the Board of Directors			20
Section 4.13		Taxes			21
Section 4.14		Employee Benefits and Labor Matters			22
Section 4.15		Environmental Matters			24
Section 4.16		Required Vote; Dissenters’ Rights			25
Section 4.17		State Takeover Statutes			26
Section 4.18		Material Contracts			26
Section 4.19		Information in Proxy Statement			27
Section 4.20		Properties			28
Section 4.21		Rights Agreement			28
Section 4.22		Intellectual Property Matters			29
Section 4.23		Communications Regulatory Matters			30
Section 4.24		Affiliate Transactions			30
Section 4.25		Swap Agreements			31
Section 4.26		CTC Long Distance Services, LLC			31
Section 4.27		No Other Representations or Warranties			31
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND THE PARENT					31
Section 5.1		Organization and Good Standing			31
Section 5.2		Authorization; Binding Agreement			31
Section 5.3		Capitalization			32
Section 5.4		No Violation			32
Section 5.5		Governmental and Other Consents and Approvals			33
Section 5.6		Proxy			33
Section 5.7		Financing			33
Section 5.8		Brokers and Finders			34
Section 5.9		No Prior Activities			34

				Page
Section 5.10		Legal Matters			34
Section 5.11		No Other Representations or Warranties			34
ARTICLE 6 ADDITIONAL AGREEMENTS IN CONNECTION WITH THE MERGER					34
Section 6.1		Shareholders’ Approval			34
Section 6.2		Proxy Materials			35
Section 6.3		Termination of Company Share Option Plans; Treatment of Other Equity Compensation Awards			35
Section 6.4		Reasonable Best Efforts; Consents; Other Filings			37
Section 6.5		Financing			39
Section 6.6		Conduct of Business by the Company Pending the Merger			39
Section 6.7		Access to the Company’s Books and Records			44
Section 6.8		No Solicitation			44
Section 6.9		Indemnification and Insurance			48
Section 6.10		Payment of Expenses; Delisting			49
Section 6.11		Employee Benefits			50
ARTICLE 7 CONDITIONS					52
Section 7.1		Conditions to Each Party’s Obligation to Effect the Merger			52
Section 7.2		Conditions to Obligations of the Company to Effect the Merger			52
Section 7.3		Conditions to Obligations of the Parent and Merger Sub to Effect the Merger			53
ARTICLE 8 TERMINATION; NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; WAIVER AND AMENDMENT					55
Section 8.1		Termination			55
Section 8.2		Non-Survival of Representations, Warranties and Covenants			56
Section 8.3		Amendment			56
Section 8.4		Waiver			57
Section 8.5		Effect of Termination			57
Section 8.6		Certain Payments			57
ARTICLE 9 GENERAL AGREEMENTS					58
Section 9.1		Notice			58
Section 9.2		Entire Agreement			59
Section 9.3		Parties in Interest			59
Section 9.4		Publicity			59
Section 9.5		Headings			60
Section 9.6		Successors and Assigns			60
Section 9.7		Governing Law			60
Section 9.8		Costs and Expenses			60
Section 9.9		Counterparts; Effectiveness			60
Section 9.10		Specific Performance			60
Section 9.11		Assignments			61
Section 9.12		Jurisdiction			61
Section 9.13		Severability			61
Section 9.14		WAIVER OF JURY TRIAL			61

AGREEMENT AND PLAN OF MERGER

     AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) dated as of May 25, 2007 by and among CT Communications, Inc., a North Carolina corporation (the “ Company ”), Windstream Marlin, Inc., a North Carolina corporation (“ Merger Sub ”), and Windstream Corporation, a Delaware corporation (the “ Parent ”), which is the sole shareholder of Merger Sub. The Company, Merger Sub and the Parent are referred to herein collectively as the “ Parties ” and individually as a “ Party .” Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in Article 1 hereof.

RECITALS

     The board of directors of the Company (the “ Board of Directors ”), and the boards of directors of the Parent and Merger Sub deem it advisable for the mutual benefit of the Company, the Parent and Merger Sub and their respective shareholders, respectively, that Merger Sub be merged with and into the Company (the “ Merger ”) upon the terms and subject to the conditions set forth herein and in the Articles of Merger (the “ Articles of Merger ”), in accordance with the North Carolina Business Corporation Act (the “ NCBCA ”).

     The boards of directors of the Parent and Merger Sub have approved and adopted this Agreement. The Board of Directors has adopted this Agreement and has resolved, subject to the terms of this Agreement, to recommend to the shareholders of the Company to vote to approve this Agreement and the Merger.

     Immediately prior to the execution of this Agreement, and as a condition to Parent and Merger Sub entering into this Agreement, the Company and American Stock Transfer and Trust Company (“ AST ”), in its capacity as attorney-in-fact for Wachovia Bank, National Association and in its capacity as successor Rights Agent, have executed an amendment (the “ Rights Plan Amendment “) to that certain Amended and Restated Rights Agreement, dated as of January 28, 1999 and effective as of August 27, 1998, (the “ Rights Plan ”), so as to render the rights issued thereunder (the “ Rights ”) inapplicable to this Agreement and the transactions contemplated hereby.

     In consideration of the mutual covenants, agreements, representations and warranties contained herein, and for the purpose of setting forth certain terms and conditions of the Merger and the manner of effecting the Merger, the Company, the Parent and Merger Sub hereby agree as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATION

      Section 1.1 Definitions .

     For all purposes of this Agreement, except as otherwise expressly provided or unless the context clearly requires otherwise:

     “ Acquisition Agreement ” is defined in Section 6.8(b).

     “ Acquisition Proposal ” is defined in Section 6.8(a).

     “ Action ” is defined in Section 6.9(a).

     “ Affiliate ” means, with respect to any Person, another Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, the first Person. For purposes of this definition, a Subsidiary of a Person shall be deemed to be an Affiliate of such Person and the term “control,” “controlled by” or “under common control with” means the power, direct or indirect, to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting capital stock, by contract, as trustee or executor, or otherwise.

     “ Agreement ” is defined in the preamble.

     “ Antitrust Division ” is defined in Section 6.4(b).

     “ Articles of Merger ” is defined in the Recitals.

     “ Board of Directors ” is defined in the Recitals.

     “ Board Recommendation ” is defined in Section 4.2(a).

     “ Business Day ” means a day other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Law to be closed.

     “ Certificate ” is defined in Section 3.1(a).

     “ Closing ” is defined in Section 2.2.

     “ Code ” is defined in Section 3.2(b).

     “ Company ” is defined in the Preamble.

     “ Company Adverse Recommendation Change ” is defined in Section 6.8(b).

     “ Company Benefit Plans ” is defined in Section 4.14(a).

     “ Company Breakup Fee ” is defined in Section 8.6(a).

     “ Company Common Stock ” is defined in Section 3.1(a).

     “ Company Disclosure Schedule ” is defined in the preamble to Article 4.

     “ Company ERISA Affiliate ” is defined in Section 4.14(c).

     “ Company Licenses ” is defined in Section 4.23(a).

     “ Company Registered IP ” is defined in Section 4.22(a).

     “ Company SEC Documents ” means all forms, schedules, statements and other documents filed or furnished, as the case may be, by the Company under the Securities Act or the Exchange Act since January 1, 2004, collectively, as the same may been amended or restated and including all exhibits and schedules thereto and documents incorporated by reference therein.

     “ Company Share Options ” is defined in Section 6.3(a).

     “ Company Shareholder Approval ” is defined in Section 4.16.

     “ Company Stock Plans ” is defined in Section 6.3(a).

     “ Confidentiality Agreement ” is defined in Section 6.7.

     “ Constituent Corporations ” is defined in Section 2.1.

     “ CTC ” means The Concord Telephone Company.

     “ Definitive Proxy Statement ” is defined in Section 6.2.

     “ Disbursing Agent ” is defined in Section 3.2(a).

     “ Effective Time ” is defined in Section 2.2.

     “ Environmental Laws ” is defined in Section 4.15(c).

     “ ERISA ” is defined in Section 4.14(a).

     “ESPP” means the Company’s 2001 Employee Stock Purchase Plan.

     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

     “ FCC ” means the Federal Communications Commission.

     “ Financial Statements ” is defined in Section 4.4(a).

     “ Financing ” is defined in Section 5.7(a).

     “ FTC ” means the United States Federal Trade Commission.

     “ GAAP ” means accounting principles generally accepted in the United States of America.

     “ Government Approvals ” is defined in Section 4.10(a).

     “ Governmental Entity ” means:

	(i)		any national, state, provincial, local, municipal, foreign or other government;
	(ii)		any governmental or quasi-governmental entity of any nature (including any agency, branch, department, board, commission, court, tribunal, or other entity exercising governmental or quasi-governmental power);
	(iii)		any body exercising any public administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; or
	(iv)		any official or political subdivision of the foregoing.

     “ GPSC ” means the Georgia Public Service Commission.

     “ Hazardous Materials ” is defined in Section 4.15(d).

     “ HSR Act ” is defined in Section 6.4(b).

     “ Indebtedness ” means, with respect to any Person at any date, without duplication: (i) all obligations of such Person for borrowed money or in respect of loans or advances, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or debt securities, (iii) all obligations in respect of letters of credit and bankers’ acceptances issued for the account of such Person, (iv) all guaranties of such Person in connection with any of the foregoing or the following, (v) all capital lease obligations of such Person, (vi) all indebtedness for the deferred purchase price of property or services with respect to which such Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables incurred in the ordinary course of business), (vii) all of the foregoing to the extent secured by any property of such Person and (viii) non-trade intercompany receivables and payables of such Person.

     “ Indemnified Party ” is defined in Section 6.9(a).

     “ Intellectual Property ” is defined in Section 4.22(b).

     “ Knowledge ” is defined in Section 1.2(j).

     “ Law ” means any applicable federal, state, provincial, regional, local, municipal, foreign or other law, treaty, constitution, statute, regulation, code, ordinance, rule, order, injunction decree, ruling, arbitration award, agency requirement, license, permit or other similar requirement enacted, adopted, promulgated or applied by a Governmental Entity or principle of common law.

     “ Liens ” is defined in Section 4.3(b).

     “ Material Adverse Change ” or “ Material Adverse Effect ” means with respect to any Person, any change or effect that either individually or in the aggregate is materially adverse to the business, assets, operations, properties, condition (financial or otherwise) or results of operations of such Person and its Subsidiaries taken as a whole; provided, however, that none of the following shall be deemed, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Material Adverse Change or Material Adverse Effect: (a) any failure of such Person to meet any internal or published projections, forecasts, or revenue or earnings predictions for any period ending prior to, on or after the date of this Agreement (it being understood that the underlying cause or causes of any such failure may be deemed to constitute, in and of itself and themselves, a Material Adverse Effect and may be taken into consideration when determining whether there has occurred a Material Adverse Effect); (b) any adverse change, effect, event, occurrence, state of facts or development to the extent attributable to the announcement or pendency of the Merger including the absence of consents, waivers or approvals relating to the Merger from any Governmental Entity or other Person; (c) any adverse change, effect, event, occurrence, state of facts or development attributable to conditions generally affecting: (i) the telecommunications industry as a whole that are not specifically related to such Person and do not have a disproportionate adverse effect on such Person, or (ii) the United States economy as a whole, including changes in economic and financial markets and regulatory or political conditions, whether resulting from acts of terrorism, war or otherwise, that do not have a disproportionate adverse effect on such Person; or (d) any adverse change, effect, event, occurrence, state of facts or development arising from or relating to any change in GAAP or any change in applicable Laws or the interpretation or enforcement thereof that, in each case, do not have a disproportionate adverse effect on such Person.

     “ Material Contracts ” is defined in Section 4.18.

     “ Merger ” is defined in the Recitals.

     “ Merger Consideration ” is defined in Section 3.1(a).

     “ Merger Sub ” is defined in the Preamble.

     “ Merger Sub Common Stock ” is defined in Section 3.1(d).

     “ NASDAQ ” is defined in Section 6.8(d).

     “ NCBCA ” is defined in the Recitals.

     “ NCUC ” means the North Carolina Utilities Commission.

     “ Notice of Superior Proposal ” is defined in Section 6.8(b).

     “ Parent ” is defined in the Preamble.

     “ Party ” and “ Parties ” are defined in the preamble.

     “ Permitted Liens ” means Liens specifically disclosed in the Financial Statements, Liens for taxes not yet due or being contested in good faith (and, with respect to those being contested, for which adequate accruals or reserves have been established in the Financial Statements) or Liens that do not materially detract from the value or materially interfere with any present or intended use of such property or assets (other than Liens securing Indebtedness).

     “ Person ” means a natural person, partnership, limited partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Entity or other entity or organization.

     “ Preferred Stock ” is defined in Section 4.3(a).

     “ Preliminary Proxy Statement ” is defined in Section 6.2.

     “ Proxy Statement ” is defined in Section 6.2.

     “ Representatives ” is defined in Section 6.8(a).

     “ Restricted Shares ” is defined in Section 6.3(b).

     “ Returns ” is defined in Section 4.13(a).

     “ Rights ” is defined in the Recitals.

     “ Rights Plan ” is defined in the Recitals.

     “ Rights Plan Amendment ” is defined in the Recitals.

     “ Sarbanes-Oxley Act ” means the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder.

     “ SCPSC ” means the South Carolina Public Service Commission.

     “ SEC ” means U.S. Securities and Exchange Commission.

     “ Securities Act ” means the Securities Act of 1933, as amended.

     “ Special Meeting ” is defined in Section 6.1.

     “ Subsidiary ” means, with respect to any Person, any corporation or other entity, whether incorporated or unincorporated, of which (a) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or other similar supervising body is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries or (b) such Person or any other Subsidiary of such Person is a general partner (including any such partnership where such Person or any Subsidiary of such Person does not have a majority of the voting interest in such partnership).

     “ Superior Proposal ” is defined in Section 6.8(a).

     “ Surviving Corporation ” is defined in Section 2.1.

     “ Tax ” or “ Taxes ” shall have the meanings given such terms in Section 4.13(a).

     “ Termination Date ” is defined in Section 8.1(b).

     “ Title IV Plan ” is defined in Section 4.14(d).

     “ WARN Act ” is defined in Section 6.6(y).

      Section 1.2 Interpretation.

     (a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

     (b) Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

     (c) The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, recitals, paragraph, exhibit and schedule references are to the articles, sections, recitals, paragraphs, exhibits and schedules of this Agreement unless otherwise specified.

     (d) The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall include all genders. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

     (e) A reference to any Party or to any party to any other contract or document shall include such party’s successors and permitted assigns. A reference to a contract shall include all amendments and modifications thereto.

     (f) A reference to any legislation or to any provision of any legislation shall include any amendment to, and any modification or re-enactment thereof, any legislative provision substituted therefore and all rules, regulations and statutory instruments issued thereunder or pursuant thereto.

     (g) The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.

     (h) The words “ordinary course of business” shall be construed to mean consistent in nature, scope and magnitude with past practices.

     (i) The words “currently,” “presently” and words of similar meaning shall mean as of the date hereof and as of the Effective Time.

     (j) As used herein, “knowledge” (or words to such effect) of the Company shall mean actual knowledge of the executive officers of the Company and its Subsidiaries after reasonable inquiry, as the case may be, and “knowledge” (or words to such effect) of the Parent or Merger Sub shall mean the actual knowledge of their executive officers after reasonable inquiry.

     (k) The phrases “transactions contemplated hereby,” “transactions contemplated by this Agreement,” or “on the terms set forth in this Agreement” and terms of similar import shall be deemed to include and refer to, without limitation, the financing arrangements of Parent.

ARTICLE 2

MERGER AND ORGANIZATION

      Section 2.1 The Merger .

     Merger Sub shall be merged with and into the Company at the Effective Time, upon the terms and subject to the conditions hereinafter set forth, as permitted by and in accordance with the NCBCA. Merger Sub and the Company are herein sometimes referred to as the “ Constituent Corporations ,” and the Company, which shall be the surviving corporation following the effectiveness of the Merger, is sometimes referred to herein as the “ Surviving Corporation .”

      Section 2.2 Effective Time .

     If this Agreement is not terminated pursuant to Article 8 hereof, the closing of the Merger (the “ Closing ”) shall take place at the offices of Moore & Van Allen, PLLC, 100 North Tryon Street, Charlotte, North Carolina 28202, as soon as practicable, but in no event later than the second Business Day after the satisfaction or waiver of the conditions set forth in Article 7 (excluding conditions that, by their terms, cannot be satisfied until the Closing, but the Closing shall be subject to the satisfaction or waiver of those conditions), or at such other place or at such other date as the Parties may mutually agree. At the Closing, the Parties shall cause the Merger to be consummated by filing the Articles of Merger with the Secretary of State of the State of North Carolina, in such form as required by, and executed in accordance with, the relevant provisions of the NCBCA (the date and time of the filing of the Articles of Merger with the Secretary of State of the State of North Carolina, or such later time as is specified in the Articles of Merger and as is agreed to by the Parties hereto, being the “ Effective Time ”) and shall make all other filings or recordings required under the NCBCA in connection with the Merger.

      Section 2.3 Effect of Merger .

     The Parties agree to the following provisions with respect to the Merger:

     (a) The name of the Surviving Corporation shall from and after the Effective Time be and continue to be “CT Communications, Inc.” until changed in accordance with applicable Law.

     (b) The articles of incorporation of the Company shall be amended and restated to conform to the articles of incorporation of Merger Sub as in effect immediately prior to the Effective Time.

     (c) The bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with Law, the articles of incorporation of the Surviving Corporation and such bylaws.

     (d) At the Effective Time, the separate corporate existence of Merger Sub shall cease, and the Company as the surviving corporation and successor shall succeed to Merger Sub as set forth in Section 55-11-06 of the NCBCA.

     (e) Each of the Parties hereto shall take all necessary action to cause the directors of Merger Sub immediately prior to the Effective Time to be the initial directors of the Surviving Corporation and the officers of the Company immediately prior to the Effective Time to be the initial officers of the Surviving Corporation, in each case until their successors are elected and qualified.

ARTICLE 3

CONVERSION OF SECURITIES AT THE EFFECTIVE TIME

      Section 3.1 Conversion of Securities of the Company and Merger Sub .

     At the Effective Time, pursuant to this Agreement and by virtue of the Merger and without any action on the part of the Company, Merger Sub or the holders of any of the following securities:

     (a) Each share of common stock of the Company, together with any Rights associated therewith (the “ Company Common Stock ”), issued and outstanding immediately prior to the Effective Time (other than any shares of Company Common Stock to be cancelled pursuant to Section 3.1(b) and (c)) shall be cancelled and extinguished and shall be converted automatically into the right to receive an amount equal to $31.50 in cash, without interest (the “ Merger Consideration ”), payable to the holder thereof, as provided in Section 3.2, upon surrender of the certificate (or evidence of shares of Company Common Stock in book-entry form) formerly representing shares of Company Common Stock (each a “ Certificate ”) being converted into the right to receive the Merger Consideration, less any required withholding Taxes. As of the Effective Time, such shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of a Certificate shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration.

     (b) Each share of Company Common Stock owned by Merger Sub (including shares of Company Common Stock contributed to the Parent by agreement with the Parent which are in turn contributed by the Parent to Merger Sub), if any, immediately prior to the Effective Time shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto.

     (c) Each share of Company Common Stock held by Company or any Subsidiary of Company immediately prior to the Effective Time shall be cancelled and extinguished without any conversion thereof or the payment of any consideration therefor.

     (d) Each share of Merger Sub’s common stock (“ Merger Sub Common Stock ”) that is issued and outstanding immediately prior to the Effective Time shall be converted into one newly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

     (e) The Rights Plan shall be terminated.

     (f) The Company Share Options and Restricted Shares will be converted in accordance with the terms of Section 6.3.

      Section 3.2 Payment of Cash for Company’s Common Stock .

     (a) At the Effective Time, the Parent or Merger Sub shall irrevocably deposit or cause to be deposited with a bank or trust company reasonably acceptable to the Company (the “ Disbursing Agent ”), as agent for the holders of shares of Company Common Stock, cash in the aggregate amount required to effect conversion of shares of Company Common Stock into the Merger Consideration at the Effective Time pursuant to Section 3.1(a) hereof. Pending distribution pursuant to Section 3.2(b) hereof of the cash deposited with the Disbursing Agent, such cash shall be held in trust for the benefit of the holders of Company Common Stock and the fund shall not be used for any other purposes, and the Parent may direct the Disbursing Agent to invest such cash provided that the Parent shall promptly replace any funds deposited with the Disbursing Agent lost through any investment made pursuant to this Section 3.2(a). Promptly after the Effective Time (but in no event more than three (3) Business Days thereafter), the Surviving Corporation shall cause the Disbursing Agent to mail to each holder of record of Company Common Stock (i) a letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon surrender of the Certificates to the Disbursing Agent and which shall be in such form and shall have such other customary provisions and (ii) instructions for use in effecting the surrender of the Certificates in exchange for payment of the Merger Consideration. Each holder of a Certificate or Certificates cancelled on the Effective Time pursuant to Section 3.1(a) hereof may thereafter surrender such Certificate or Certificates to the Disbursing Agent, as agent for such holder of shares of Company Common Stock, which shall effect the exchange of such Certificate or Certificates on such holder’s behalf for a period ending six (6) months after the Effective Time. Any interest and other income resulting from such investments shall promptly be paid to the Parent.

     (b) After surrender to the Disbursing Agent of any Certificate which prior to the Effective Time shall have represented any shares of Company Common Stock together with a letter of transmittal, duly completed and validly executed in accordance with the instructions (and such other customary documents as may reasonably be required by the Disbursing Agent), the Disbursing Agent shall promptly distribute to the Person in whose name such Certificate shall have been registered a check representing the Merger Consideration into which such shares of Company Common Stock shall have been converted at the Effective Time pursuant to Section 3.1(a) hereof. Until so surrendered and exchanged, each such Certificate shall, after the Effective Time, be deemed to represent only the right to receive the Merger Consideration, and any declared but unpaid dividends to which the holder of such Certificate is entitled, and until such surrender and exchange, no cash (other than any such declared but unpaid dividends) shall be paid to the holder of such outstanding Certificate in respect thereof. Each of Parent, the Disbursing Agent and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common Stock, Company Share Options and Restricted Shares such amounts as may be required to be deducted or withheld therefrom under the Internal Revenue Code of 1986, as amended (the “ Code ”) or under any provision of state, local or foreign tax Law or under any other applicable Law. To the extent such amounts are so deducted or withheld, the amount of such consideration shall be treated for all purposes under this Agreement as having been paid to the Person to whom such consideration would otherwise have been paid.

     (c) If any cash deposited with the Disbursing Agent for purposes of payment in exchange for shares of Company Common Stock remains unclaimed following the expiration of six (6) months after the Effective Time, such cash shall be delivered to the Surviving Corporation by the Disbursing Agent, and thereafter the Disbursing Agent shall not be liable to any Persons claiming any amount of such cash, and the surrender and exchange shall be effected directly with the Surviving Corporation (subject to applicable abandoned property, escheat and similar Laws). No interest shall accrue or be payable with respect to any amounts which any such holder shall be so entitled to receive. The Surviving Corporation or the Disbursing Agent shall be authorized to pay the cash attributable to any Certificate theretofore issued which has been lost or destroyed, upon receipt of appropriate indemnification and satisfactory evidence of ownership of the shares of Company Common Stock represented thereby.

     (d) None of Merger Sub, the Surviving Corporation or the Disbursing Agent shall be liable to any Person in respect of any shares of retained Company Common Stock (or dividends or distributions with respect thereto) or cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

     (e) If payment is to be made to a Person other than the Person in whose name a surrendered Certificate, which prior to the Effective Time shall have represented any shares of Company Common Stock, is registered, it shall be a condition to such payment that the Certificate so surrendered shall be endorsed or shall otherwise be in proper form for transfer, and that the Person requesting such payment shall have paid any transfer and other Taxes required by reason of such payment in a name other than that of the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation or the Disbursing Agent that such Tax either has been paid or is not payable.

     (f) From and after the Effective Time, the holders of shares of Company Common Stock, Company Share Options and/or Restricted Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Company Common Stock, Company Share Options and/or Restricted Shares except as otherwise provided herein or by Law.

     (g) The payment of the Merger Consideration in accordance with the terms of this Article 3 shall be deemed payment in full satisfaction of all rights and obligations of the Company, Parent or the Surviving Corporation pertaining to the Company Common Stock, Company Share Options and the Restricted Shares.

     (h) After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of any shares of Company Common Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented by the record holder to the Surviving Corporation, except as provided in Section 3.2(c), they shall be cancelled and promptly exchanged for the Merger Consideration, less applicable taxes, and any declared but unpaid dividends to which the holder of such Certificate is entitled.

      Section 3.3 Exchange of Merger Sub Common Stock Certificate .

     Immediately after the Effective Time, upon surrender by the record holder of the certificate, duly endorsed in blank, representing the shares of Merger Sub Common Stock outstanding immediately prior to the Effective Time, the Surviving Corporation shall deliver to such record holder a stock certificate, registered in such holder’s name, representing the number of shares of common stock of the Surviving Corporation to which such record holder is so entitled by virtue of Section 3.1(d). Such certificate will bear a legend restricting the transferability of such shares of the Surviving Corporation except in accordance with applicable federal and state securities Laws.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as set forth in (i) Company SEC Documents filed since March 7, 2007 and prior to the date hereof (excluding any disclosures in such Company SEC Documents under the heading “Risk Factors” and any other disclosures of risks and uncertainties that are predictive and forward looking in nature and solely to the extent the relevance of the information disclosed in such Company SEC Documents to the representations and warranties set forth in this Article 4 is readily apparent on its face), or (ii) a separate disclosure schedule (the “ Company Disclosure Schedule ”) which has been delivered by the Company to Parent immediately prior to the execution of this Agreement and signed by an authorized officer of the Company, each section of which qualifies the correspondingly numbered representation and warranty to the extent specified therein and such other representations and warranties to the extent a matter in such section is disclosed in such a way as to make its relevance to the information called for by such other representation and warranty reasonably apparent on its face, (to the extent any information disclosed in the Company SEC Documents conflicts with or is otherwise inconsistent with the information disclosed in the Company Disclosure Schedule, the information disclosed in the Company Disclosure Schedule shall control for purposes of qualifying the representations and warranties set forth in this Article 4) the Company hereby represents and warrants to Merger Sub and the Parent as follows:

      Section 4.1 Organization and Good Standing .

     (a) Each of the Company and its Subsidiaries is a duly organized and validly existing corporation in good standing under the Laws of the state of its incorporation with all requisite power and authority (corporate and other) to own, lease and operate its properties and assets and conduct its business and is duly qualified and in good standing as a foreign corporation authorized to do business in each of the jurisdictions in which the character of the properties owned or held under lease by it or the nature of the business transacted by it makes such qualification necessary, except where the failure to be so qualified would not have and would not reasonably be expected to have a Company Material Adverse Effect.

     (b) The Company has heretofore delivered to Parent accurate and complete copies of (i) all minutes of meetings and actions by written consent of the respective boards of directors, or

other governing body, of each of the Company and its Subsidiaries and all committees thereof from January 1, 2004 through December 31, 2006, (ii) all minutes of meetings and actions by written consent of the respective shareholders of each of the Company and its Subsidiaries from January 1, 2004 through December 31, 2006 and (iii) drafts of minutes of meetings of the Board of Directors from January 1, 2007 through March 31, 2007.

      Section 4.2 Authorization; Binding Agreement .

     (a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby are within the Company’s corporate powers and have been duly and validly authorized by the Board of Directors and, except for Company Shareholder Approval, no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company, and subject to Company Shareholder Approval, constitutes the legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other Laws, now or hereafter in effect, relating to or limiting creditors’ rights generally, and (b) general principles of equity (whether considered in an action in equity or at Law) which provide, among other things, that the remedies of specific performance and injunctive and other forms of equitable relief are subject to equitable defenses and to the discretion of the court before which any proceedings therefor may be brought.

     (b) The Board of Directors has unanimously (i) adopted and approved this Agreement and the submission of this Agreement to the Company’s shareholders for approval; (ii) determined that this Agreement and the Merger are advisable and in the best interests of the Company and its shareholders; and (iii) recommended that the Company’s shareholders approve this Agreement and the Merger (the “ Board Recommendation ”) and none of the aforesaid actions by the Board of Directors in clauses (i) and (ii) has been amended, rescinded or modified except as expressly permitted by Section 6.8 hereof.

      Section 4.3 Capitalization .

     (a) The authorized capital stock of the Company consists of 100,000,000 shares of Company Common Stock, 2,000 shares of preferred stock designated as Four and One-Half Percent Preferred Stock and 17,000 shares of preferred stock designated as Five Percent Preferred Stock (collectively, the “ Preferred Stock ”). As of April 30, 2007, 20,272,951 shares of Company Common Stock (of which 242,583 were Restricted Shares) were outstanding and no additional shares have been issued since such date except in the ordinary course of business consistent with prior practice pursuant to the ESPP or upon exercise of options to purchase Company Common Stock outstanding on such date. As of the date hereof, no shares of Company Common Stock are held in the treasury of the Company, no shares of Company Common Stock are held by Subsidiaries of the Company, and no shares of Preferred Stock are outstanding.

     (b)  Item 4.3(b) of the Company Disclosure Schedule sets forth a true and correct list of all of the Company’s Subsidiaries, together with their respective authorized capital stock and record ownership of all issued and outstanding shares of capital stock of such Subsidiaries. Except as set forth in Item 4.3(b) of the Company Disclosure Schedule or as reflected in “Short-Term Investments” and “Investments” on the Company’s consolidated balance sheet at March 31, 2007, the Company does not have any other Subsidiaries or own or hold, directly or indirectly, any equity, or has not made any investment, in any other Person. All issued and outstanding shares of capital stock of the Company’s Subsidiaries have been duly authorized, validly issued, are fully paid and nonassessable and subject to no preemptive rights and are directly or indirectly owned beneficially and of record by the Company. All issued and outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company or a Subsidiary of the Company free and clear of all liens, pledges, charges, security interests and other encumbrances or other limitations or restrictions (including any restriction on the right to vote, sell or otherwise dispose of such capital stock) (collectively “ Liens ”).

     (c) Except for: (1) issued and outstanding Company Common Stock referenced in Section 4.3(a)(i), and (2) up to, but not to exceed, 570,000 shares of Company Common Stock reserved for issuance upon exercise of outstanding Company Share Options, which have an average exercise price of not less than $15.54, at the time of execution of this Agreement and at Closing, no shares of capital stock or other voting securities of the Company or any of its Subsidiaries (whether or not vested) are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company have been duly authorized, validly issued, are fully paid and nonassessable and subject to no preemptive rights. Except for the Company Common Stock, there are no bonds, debentures, notes or other indebtedness or securities of the Company or any of its Subsidiaries having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Company or such Subsidiary may vote. Except for the Rights, Company Share Options and the Restricted Shares, there are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any such Person is bound obligating such Person to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or any of its Subsidiaries or obligating such Person to issue, grant, extend or enter into any such security, option, warrant, call right, commitment, agreement, arrangement or undertaking. There are no outstanding rights, commitments, agreements, arrangements or undertakings of any kind obligating the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or other voting securities of the Company or any of its Subsidiaries or any securities of the type described in this Section 4.3(c).

     (d) The names of the optionee of each Company Share Option, the date of grant of each Company Share Option, the number of shares subject to each such Company Share Option, the expiration date of each such Company Share Option, and the price at which each such Company Share Option may be exercised under the Company Stock Plans as of April 30, 2007 are set forth in Item 4.3(d) of the Company Disclosure Schedule.

     (e) The name of each holder of Restricted Shares, the date of issuance, the number of shares of Restricted Shares and the vesting schedule as of April 30, 2007 are set forth in Item 4.3(e) of the Company Disclosure Schedule.

      Section 4.4 Financial Statements; No Undisclosed Material Liabilities .

     (a) All consolidated financial statements of the Company and its Subsidiaries (including the notes to such financial statements) included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (collectively, the “ Financial Statements ”) filed pursuant to the Exchange Act (a) complied in all material respects with published rules and regulations of the SEC with respect thereto, (b) are in accordance with the books and records of the Company and its Subsidiaries in all material respects, and (c) present fairly in all material respects the consolidated financial position of the Company and its Subsidiaries and the consolidated results of their operations and their cash flows as of the respective dates and for the respective periods indicated, all in conformity with GAAP applied on a consistent basis through all the periods involved (except, in the case of unaudited interim statements, as indicated in the notes thereto), subject, in the case of unaudited interim statements, to normal year-end audit adjustments.

     (b) Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature, whether accrued, contingent, absolute or otherwise that are required by GAAP to be disclosed on a consolidated balance sheet other than (i) those disclosed in the Financial Statements, (ii) liabilities or obligations of a nature arising in the ordinary course of business since March 31, 2007, or (iii) those disclosed in Item 4.4(b) of the Company Disclosure Schedule.

      Section 4.5 Absence of Certain Changes or Events .

     Except as disclosed in Item 4.5 of the Company Disclosure Schedule, since March 31, 2007, (a) there has not been any Company Material Adverse Change, (b) there has not been any damage, destruction or loss (whether covered by insurance or not) or event, occurrence, development or state of circumstances or facts that, individually or in the aggregate, had or would reasonably be expected to have a Company Material Adverse Effect, (c) there has been no condition, event or occurrence which could reasonably be expected to prevent, materially hinder or materially delay the ability of the Company to consummate the Merger or the transactions contemplated by this Agreement, and (d) neither the Company nor any of its Subsidiaries have: (1) amended or otherwise changed its articles of incorporation or bylaws or other organizational documents, as applicable; (2) declared, sat aside or paid any dividend or other distribution or payment in cash, stock or property in respect of any of its shares of its capital stock (other than regular quarterly dividends by the Company in an amount not greater than $0.12 per share of Company Common Stock); (3) issued, granted, sold, pledged or transferred or agreed or proposed to issue, grant, sell, pledge or transfer any shares of its capital stock, stock options, warrants, securities or rights of any kind or rights to acquire any such shares, securities or rights, other than Company Share Options and Restricted Shares issued pursuant to Company Benefit Plans to employees of the Company in the ordinary course of business consistent with past practice; (4) split, combined or reclassified any capital stock or issued or authorized the issuance

of any other securities in respect of, in lieu of or substitution for shares of capital stock; (5) repurchased, redeemed or otherwise acquired any shares of the capital stock of the Company or any of its Subsidiaries, or any securities convertible into or exercisable for any shares of the capital stock of the Company or any of its Subsidiaries; (6) adopted or amended (except as may be required by Law) any Company Benefit Plan or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any employee, director or former director or employee; (7) increased the compensation or fringe benefits of any director, employee or former director or employee or paid any benefit not required by any Company Benefit Plan, other than increases in compensation for employees of the Company and its Subsidiaries and arrangements for new employees that are in the ordinary course of business and consistent with past practice (in terms of frequency, timing and amount) and, with respect to employees other than officers and directors, isolated merit salary increases or bonuses not in the context of any broad-based plan or program; or (8) granted or committed to grant to any employee, officer, shareholder, director, consultant or agent of the Company or any of its Subsidiaries any new or modified severance, change of control, termination, retention or similar arrangement or increase or accelerate any benefits payable under its severance, retention or termination pay policies in effect on the date hereof other than in the ordinary course of business consistent with past practice (in terms of frequency, timing and amount).

      Section 4.6 SEC Reports and Other Documents .

     (a) Since January 1, 2004, the Company has timely filed or furnished, as the case may be, all Company SEC Documents required to be filed or furnished, as applicable, by it with the SEC and all such Company SEC Documents complied as to form in all material respects with the applicable requirements of Law. Each Company SEC Document did not on the date of submission of such reports (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively, and, in the case of any Company SEC Document amended or superseded by a filing prior to the date of this Agreement, then on the date of such amending or superseding filing) contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. To the Company’s knowledge, as of the date hereof, none of the Company SEC Documents is the subject of ongoing SEC review.

     (b) The Company and each of its officers and directors are in compliance with, and have complied, in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act of 2002 and the related rules and regulations promulgated thereunder such Act (the “ Sarbanes-Oxley Act ”) or the Exchange Act, and (ii) the applicable listing and corporate governance rules and regulations of NASDAQ.

      Section 4.7 Governmental Consents and Approvals .

     Except as set forth in Item 4.7 of the Company Disclosure Schedule, no consent, waiver, approval, notification, license or authorization of or designation, declaration or filing with any Governmental Entity is required in connection with the execution or delivery by the Company of

this Agreement or the consummation by the Company of the transactions contemplated hereby, other than (a) filings of the Articles of Merger in the State of North Carolina in accordance with the NCBCA, (b) filings required under the HSR Act, (c) the filing of the Proxy Statement and an amendment to the Company’s Registration Statement on Form 8-A with respect to the Rights Plan Amendment with the SEC in accordance with the Exchange Act and such current reports on Form 8-K under the Exchange Act as may be required in connection with this Agreement, the Merger and the other transactions contemplated by this Agreement, (d) approvals of and filings with the FCC, the NCUC, the GPSC, and the SCPUC as described on Item 7.1(d) of the Company Disclosure Schedule, and (e) such other consents, waivers, approvals, licenses or authorizations, the failure of which to be obtained will not have and would not reasonably be expected to have a Company Material Adverse Effect or will not materially and adversely affect the ability of the Company to consummate the transactions contemplated hereby or otherwise materially interfere with or delay the consummation of the transactions contemplated hereby.

      Section 4.8 No Violation .

     The execution and delivery of this Agreement, the filing by the Company of Articles of Merger in connection with the Merger in the State of North Carolina in accordance with the NCBCA, the consummation by the Company of the transactions contemplated hereby, or compliance by the Company with any of the provisions hereof, will not:

     (a) violate or conflict with any provision of the articles of incorporation or bylaws of the Company or any comparable charter or organizational documents of its Subsidiaries;

     (b) subject to obtaining the approvals and making the filings described in Section 4.7 hereof, cause the Company or any of its Subsidiaries to violate or breach (i) any Law or any judgment, decree, or order of any Governmental Entity applicable to the Company or any of its Subsidiaries or any of their respective properties or (ii) the award of any arbitrator or panel of arbitrators; or

     (c) except as set forth in Item 4.8(c) of the Company Disclosure Schedule, with or without notice or lapse of time, or both, violate, or be in conflict with, or constitute a breach or default under, or permit the termination of, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a benefit under, or, except as contemplated by this Agreement, require the consent of any Person under, or result in the creation of any Lien upon any property of the Company or any of its Subsidiaries under, any agreement, indenture, lease, instrument, permit, concession, franchise, license, understanding or undertaking applicable to the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries (or their respective properties) may be bound, which, in the case of clauses (b) and (c), individually or in the aggregate would have and would not reasonably be expected to have a Company Material Adverse Effect.

      Section 4.9 Legal Proceedings .

     Except as set forth in Item 4.9 of the Company Disclosure Schedule, there is no legal action, suit, complaint, arbitration or other legal, administrative or other governmental investigation, inquiry or proceeding (whether federal, state, local or foreign) pending or, to the knowledge of the Company, threatened against or affecting the Company, any of its Subsidiaries or any of their respective properties, assets, business, or Governmental Approvals before any Governmental Entity or arbitrator of competent jurisdiction, which, individually or in the aggregate, could reasonably be expected (a) to have a Company Material Adverse Effect, (b) to materially and adversely affect the ability of the Company to carry out the Merger or the transactions contemplated by this Agreement, or (c) to delay, materially interfere with, prevent or otherwise make unduly burdensome, the Merger or the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any nature of any Governmental Entity or arbitrator outstanding or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries having or which would be reasonably expected to have any such effect. Neither the Company nor any of its Subsidiaries have received any written notice of any condemnation or eminent domain proceeding affecting any owned or leased real property, and, to the knowledge of the Company, no such action or proceeding has been threatened.

      Section 4.10 Governmental Authorizations; Compliance with Law .

     (a) The Company and its Subsidiaries possess from the appropriate Governmental Entity, whether federal, state or local, all licenses, permits, authorizations, approvals, franchises, filings, authorizations and rights (“ Government Approvals ”) that are necessary for the Company and its Subsidiaries to own, lease, and operate their properties and assets or engage in the respective businesses currently conducted by them, except in those instances in which failure to possess Government Approvals, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect or materially interfere with or delay the transactions contemplated hereby. The Company and its Subsidiaries are in compliance with all applicable federal, state and local Laws, individually or in the aggregate, except where the failure to so comply, has not had or would not reasonably be expected to result in a Company Material Adverse Effect.

     (b) The Company has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the management of the Company as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. The management of the Company has

completed its assessment of the effectiveness of the Company’s internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2006, and such assessment concluded that such controls were effective to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP. The Company has disclosed, based on its assessment of the effectiveness of the Company’s internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2006, to the Company’s independent registered accounting firm and the audit committee of the Board of Directors (A) all significant deficiencies in the design or operation of internal controls over financial reporting and any material weaknesses, which by definition have more than a remote chance to materially adversely affect the Company’s ability to record, process, summarize and report financial data (as defined in Rule 13a-15(f) of the Exchange Act) and (B) any known fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting for the quarter ended March 31, 2007. The Company has made available to Parent a summary of any such disclosures made by management to the accounting firm or audit committee for the year ended December 31, 2006.

     (c) Neither the Company nor any of its Subsidiaries is in violation of any requirement of applicable Law related to privacy, data protection or the collection and use of personal information gathered or used by the Company and its Subsidiaries applicable to the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries or any of their respective businesses or properties is bound, except for conflicts, violations and defaults that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

      Section 4.11 Brokers and Finders .

     Except as set forth in Item 4.11 of the Company Disclosure Schedule, no broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger based upon arrangements made by or on behalf of the Company or its Subsidiaries.

      Section 4.12 Fairness Opinion and Approval by the Board of Directors .

     On or prior to the date hereof, the Board of Directors unanimously approved the terms of this Agreement in accordance with applicable Law and the Company’s articles of incorporation (including without limitation Article 12 thereof) and bylaws and received an opinion from Raymond James & Associates, Inc. as of the date hereof, that, from a financial point of view, the consideration to be received by the holders of Company Common Stock pursuant to the Merger is fair to them, a true and complete copy of such written opinion has been or will promptly be delivered to the Parent following its receipt by the Board of Directors. Such opinion has not been withdrawn, revoked, or otherwise modified as of the date of this Agreement. The Company has delivered a complete and accurate copy of such opinion to Parent (which such opinion shall be included in the Proxy Statement delivered to the Company’s shareholders).

      Section 4.13 Taxes .

     (a) All Returns (as hereinafter defined) required to be filed by or with respect to the Company and its Subsidiaries have been filed on a timely basis, except where the failure to file such Returns would not individually or in the aggregate have and would not reasonably be expected to have a Company Material Adverse Effect. All such Returns were correct and complete in all material respects. There are no material deficiencies for Taxes that have been asserted or assessed against the Company or its Subsidiaries that remain unpaid. The Company and its Subsidiaries have paid or made adequate provision in all material respects in the Financial Statements (other than reserves for deferred income Taxes established to reflect differences between book basis and Tax basis of assets and liabilities) for the payment of all Taxes due and owing by the Company and its Subsidiaries, whether or not shown on any Return. The term “ Tax ” or “ Taxes ” means all federal, state, local, foreign and other net income, gross income, gross receipts, franchise, sales, use, withholding, employment, property alternative or add-on minimum, environmental (including Taxes under Section 59A of the Code) or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “ Returns ” means all returns, declarations, reports, statements and other documents required to be filed in respect of Taxes, including any schedule or attachment thereto, and including any amendment thereof.

     (b)  Item 4.13(b) of the Company Disclosure Schedule lists all Returns that are currently the subject of audit. Except as set forth on Item 4.13(b) of the Company Disclosure Schedule neither the Company nor any of its Subsidiaries has granted any extension or waiver of the statute of limitations period on the assessment of any material Taxes, which period (after giving effect to such extension or waiver) has not expired. Neither the Company nor any of its Subsidiaries has granted a power of attorney with respect to any matter relating to any material Tax. No claim has been made by an authority in a jurisdiction where the Company or any of its Subsidiaries does not file Returns that it is or may be subject to Tax in that jurisdiction.

     (c) The Company and each of its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid by the Company or such Subsidiary in connection with amounts paid or owing to any employee, independent contractor, shareholder, partner, or other third party.

     (d) Except as disclosed in Item 4.13(d) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has made any payments, is obligated to make any payments, or is a party to any agreement, contract, arrangement or plan that could obligate it to make any payments that will not be deductible under Section 280G of the Code or would constitute compensation in excess of the limitation set forth in Section 162(m) of the Code. No director, officer or employee of the Company or any of its Subsidiaries is entitled to receive any additional payment from the Company, any of its Subsidiaries or any other Person in the event that the excise Tax required by Section 4999(a) of the Code, any Tax imposed under Section 409A of the Code or any other Tax is imposed on such individual.

     (e) No material claim for unpaid Taxes has become a Lien (other than a Permitted Lien) of any kind against the property or assets of the Company or any of its Subsidiaries.

     (f) None of the Returns filed by or on behalf of the Company or any Subsidiary of the Company contains or will contain a disclosure statement under Sections 6662 and 6662A of the Code or any similar provisions of Law.

     (g) Neither the Company nor any of its Subsidiaries is a party to any agreement providing for the allocation, indemnification or sharing of Taxes other than such an agreement exclusively between or among the Company and any of its Subsidiaries, and neither the Company nor any of its Subsidiaries (A) has been a member of an affiliated group (or similar state, local or foreign filing group) filing a material consolidated income Return (other than a group the common parent of which is the Company) or (B) has any material liability (including as a result of any agreement or obligation to reimburse or indemnify) for the Taxes of any other Person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Tax Law), as a transferee or successor, by contract or otherwise.

     (h) Neither the Company nor any of its Subsidiaries: (A) has agreed to make or is required to make any adjustment for a taxable period ending after the Effective Time under Section 481(a) of the Code by reason of a change in accounting method or otherwise, except where such adjustments do not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; or (B) constituted either a “distributing corporation” or a “controlled corporation’’ (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (I) in the two years prior to the date of this Agreement or (II) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in connection with the Merger.

     (i) No excess loss account (within the meaning of Treasury Regulation 1.1502-19) exists with respect to the Company or any Subsidiary of the Company.

      Section 4.14 Employee Benefits and Labor Matters .

     (a) Item 4.14(a) of the Company Disclosure Schedule lists all employee benefit plans, programs, arrangements, funds, policies, practices, or contracts and samples of representative employment agreements with respect to which, through which, or under which the Company or any of its Subsidiaries has any material liability to provide benefits or compensation to or on behalf of employees, former employees, or independent contractors of the Company or any of its Subsidiaries, whether formal or informal, whether or not written, including any employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)), any multiemployer plan (as defined in Section 3(37) and Section 4001(a)(3) of ERISA), and any stock purchase, stock option, severance, employment, change in control, fringe benefit, collective bargaining, bonus, incentive, or deferred compensation arrangement (collectively, the “ Company Benefit Plans ”). The Company has made available to the Parent a true and complete copy of the following documents, if applicable, with respect to each Company Benefit Plan: (i) all documents setting forth the terms of the Company Benefit Plan, or if there are no such documents evidencing the Company Benefit Plan,

a full description of the Company Benefit Plan, (ii) the ERISA summary plan description and any other written summary of plan provisions provided to participants or beneficiaries for each such Company Benefit Plan, (iii) the annual report (Form 5500 series), required under ERISA or the Code, filed for the most recent plan year and most recent financial statements or periodic accounting of related plan assets with respect to each Company Benefit Plan, and (iv) the most recent favorable determination letter, opinion, or ruling from the Internal Revenue Service for each Company Benefit Plan, the assets of which are held in trust, to the effect that such trust is exempt from federal income Tax.

     (b) Each Company Benefit Plan has at all times been maintained, by its terms and in operation in all material respects, in accordance with the Code, ERISA, and other applicable Law. Each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code, and any related trust that is intended to be tax-exempt under Section 501(a) of the Code, has received a favorable determination letter from the Internal Revenue Service to the effect that such plan is qualified under the Code and such trust is tax-exempt, and any such determination letter remains in effect and has not been revoked. The Company is not aware of any reason why any such determination should be revoked or not reissued. All contributions required to be made prior to Closing under the terms of each Company Benefit Plan, the Code, ERISA, or other applicable Law have been or will be timely made, and adequate reserves have been provided for by the Company with respect to all accrued benefits attributable to service on or prior to the Closing.

     (c) Except as disclosed in Item 4.14(c) of the Company Disclosure Schedule, each Company Benefit Plan may be amended or terminated at any time without any obligation or liability other than for benefits accrued prior to such amendment or termination, or as required to be vested pursuant to applicable Law as a result of such amendment or termination. There are no actions, audits, suits, or claims which are pending or, to the knowledge of the Company threatened, against any Company Benefit Plan, except claims for benefits made in the ordinary course of the operation of such plans that, if adversely determined, would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries is subject to any material liability, Tax, or penalty whatsoever to any Person whomsoever as a result of the Company or any of its Subsidiaries engaging in a prohibited transaction under ERISA or the Code. To the knowledge of the Company, no event has occurred and no condition exists that would subject the Company, either directly or by reason of its affiliation with any trade or business (whether or not incorporated) which together with the Company is treated as a single employer under Section 414(b), (c), (m), or (o) of the Code (“ Company ERISA Affiliate ”), to any material liability, Tax, or penalty imposed by ERISA, the Code, or other applicable Law.

     (d) Except as disclosed in Item 4.14(d) of the Company Disclosure Schedule, neither the Company nor any Company ERISA Affiliate maintains, nor has at any time established or maintained, nor has at any time been obligated to make, or made, contributions to or under any plan subject to Title IV of ERISA (a “ Title IV Plan ”). No “accumulated funding deficiency,” as defined in Section 412 of the Code, has been incurred with respect to any Title IV Plan Company Benefit Plan subject to such Section 412, whether or not waived. No “reportable event,” within the meaning of Section 4043 of ERISA, and no event described in Sections 4062 or 4063 of

ERISA, has occurred in connection with any Company Benefit Plan. Neither the Company nor any Company ERISA Affiliate thereof has (i) engaged in, or is a successor or parent corporation to an entity that has engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA or (ii) incurred, or reasonably expects to incur prior to the Effective Time (A) any liability under Title IV of ERISA arising in connection with the termination of, or a complete or partial withdrawal from, any Title IV Plan or (B) any liability under Section 4971 of the Code that in either case could become a liability of Parent or any of its Affiliates after the Effective Time. None of the Company or any of the Company ERISA Affiliates make contributions or has any obligation to make contributions to any multiemployer plan (as defined in Section 3(37) of ERISA).

     (e) Neither the Company nor any of its Subsidiaries is a party to or is bound by any labor or collective bargaining agreement, and, as of the date of this Agreement and to the knowledge of the Company, there are no organizational campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit with respect to, or otherwise attempting to represent, any of the employees of the Company or any of its Subsidiaries.

     (f) There are no strikes, work slowdowns, work stoppages, lockouts, arbitrations, grievances, unfair labor practice charges or complaints pending or, to the knowledge of the Company, threatened with respect to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries has experienced any such strikes, slowdowns, work stoppages, lockouts, arbitrations, grievances, unfair labor practice charges or complaints within the past three years, that, individually or in the aggregate, have had or would reasonably be expected to have a Company Material Adverse Effect. Each of the Company and its Subsidiaries is in compliance with all applicable Laws relating to labor, employment, termination of employment or similar matters and has not engaged in any unfair labor practices or similar prohibited practices except in each case for any instances of noncompliance that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

     (g) Each “nonqualified deferred compensation plan” (within the meaning of Section 409A of the Code) sponsored, maintained or participated in by the Company or any of its Subsidiaries (or to which the Company or any of its Subsidiaries is (or was) a party) at any time since January 1, 2005 has been operated and administered since January 1, 2005, in all material respects, in good faith compliance with Section 409A of the Code and any guidance issued by the United States Treasury Department or the IRS thereunder (including IRS Notice 2005-1 and the proposed Treasury regulations issued on September 29, 2005), to the extent applicable to such plan.

      Section 4.15 Environmental Matters .

     (a) Except as disclosed on Item 4.15(a) of the Company Disclosure Schedule and those matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect, (i) each of the Company and its Subsidiaries is and has been in compliance with all applicable Environmental Laws, (ii) there is

no notice of violation in writing, investigation, suit, claim, action or proceeding relating to or arising under Environmental Laws that is pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries or any real property currently or, to the knowledge of the Company, formerly owned, operated or leased by the Company or any of its Subsidiaries, (iii) neither the Company nor any of its Subsidiaries has received any written notice of, or entered into, any order, settlement, judgment, injunction or decree (or, to the knowledge of the Company, has agreed to perform or entered into any contractual obligation with a reasonable likelihood of requiring a material payment) involving uncompleted, outstanding or unresolved obligations, liabilities or requirements relating to or arising under Environmental Laws; and (iv) to the knowledge of the Company, no Hazardous Materials have been released at, on, above, under or from any properties currently or formerly owned, leased or operated by the Company or any of its Subsidiaries, nor to the knowledge of the Company are there