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Exhibit
2.3
AMENDED AND
RESTATED
SHARE EXCHANGE
AGREEMENT
BY AND AMONG
WINDSTREAM
CORPORATION,
WELSH, CARSON,
ANDERSON & STOWE VIII, L.P.,
WELSH, CARSON,
ANDERSON & STOWE IX, L.P.,
WCAS CAPITAL PARTNERS III,
L.P.,
REGATTA HOLDING I,
L.P.,
REGATTA HOLDING II,
L.P.
AND
REGATTA HOLDING III,
L.P.
DATED AS OF AUGUST 16,
2007
TABLE OF
CONTENTS
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Page |
| ARTICLE I EXCHANGE |
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2 |
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1.1
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Transfer
of Holdings Shares |
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2 |
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1.2
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Transfer
of Exchanged WIN Shares |
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2 |
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1.3
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Closing |
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3 |
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1.4
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Deliveries by WIN |
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3 |
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1.5
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Deliveries by the WCAS Subs |
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4 |
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1.6
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Net
Working Capital Calculation and Adjustment |
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4 |
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| ARTICLE II RELATED MATTERS |
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7 |
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2.1
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Ancillary
Agreements |
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7 |
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2.2
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Intercompany Obligations; Affiliate Agreements; Certain Other
Intercompany Matters |
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8 |
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2.3
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Resignations |
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9 |
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2.4
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Guaranties |
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9 |
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2.5
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Related
Transactions |
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9 |
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2.6
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Coordination of Holdings Financing and Debt
Exchange |
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10 |
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2.7
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Private
Letter Rulings |
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11 |
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2.8
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Termination of Forward Underwriting Commitment |
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12 |
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2.9
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Repayment
of Division Indebtedness |
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12 |
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| ARTICLE III REPRESENTATIONS AND WARRANTIES OF WIN |
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12 |
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3.1
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Authority |
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13 |
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3.2
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Title to
Holdings Shares |
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13 |
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3.3
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Organization and Qualification |
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13 |
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3.4
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Capitalization of Holdings |
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14 |
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3.5
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Capitalization of the Division Subsidiaries |
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14 |
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3.6
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No
Violation; Consents and Approvals |
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14 |
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3.7
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Financial
Statements; Undisclosed Liabilities |
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15 |
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3.8
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Absence
of Certain Changes or Events |
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16 |
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3.9
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Title to
Personal Property |
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16 |
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3.10
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Title to
Real Property |
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16 |
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3.11
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Intellectual Property |
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17 |
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3.12
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Litigation |
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18 |
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3.13
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Employee
Benefit Plans |
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18 |
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3.14
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Taxes |
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20 |
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3.15
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Material
Contracts and Commitments |
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21 |
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3.16
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Compliance with Laws |
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23 |
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3.17
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Labor
Matters |
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24 |
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3.18
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Environmental |
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24 |
i
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3.19
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Transactions with Affiliates |
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25 |
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3.20
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Insurance |
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25 |
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3.21
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Assets of
the Division |
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25 |
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3.22
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Newly
Formed Entity |
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26 |
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3.23
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Brokers |
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26 |
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3.24
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NO OTHER
REPRESENTATIONS |
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26 |
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| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENTS AND WCAS
SUBS |
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26 |
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4.1
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Organization; Authority |
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26 |
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4.2
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No
Violation; Consents and Approvals |
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27 |
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4.3
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Title to
Exchanged WIN Shares |
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27 |
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4.4
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Litigation |
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28 |
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4.5
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Capitalization of Division |
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28 |
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4.6
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Acquisition of the Holdings Shares for Investment |
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29 |
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4.7
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Investigation by the WCAS Subs |
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29 |
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4.8
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Brokers |
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29 |
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| ARTICLE V COVENANTS OF THE PARTIES |
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29 |
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5.1
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Conduct
of the Division |
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29 |
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5.2
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Access to
Information Prior to the Closing; Confidentiality;
Cooperation |
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32 |
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5.3
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Commercially Reasonable Efforts |
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33 |
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5.4
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Consents |
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33 |
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5.5
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Antitrust
Notification |
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34 |
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5.6
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Public
Announcements |
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34 |
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5.7
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Supplemental Disclosure; Notice |
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35 |
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5.8
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Records |
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35 |
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5.9
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Financial
Statements |
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36 |
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| ARTICLE VI ADDITIONAL AGREEMENTS |
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36 |
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6.1
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Continuing Division Employees; Employee Benefits |
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36 |
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6.2
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Certain
Agreements |
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39 |
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6.3
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Workers’ Compensation |
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39 |
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6.4
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Use of
WIN’s Name and Logo |
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39 |
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6.5
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ALLTEL
Non-Solicitation |
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40 |
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6.6
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Termination of WCAS Securityholders Agreement |
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40 |
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| ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE
PARTIES |
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41 |
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7.1
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Mutual
Conditions |
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41 |
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7.2
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Conditions to the Obligations of WIN |
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42 |
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7.3
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Conditions to the Obligations of the WCAS Subs |
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43 |
ii
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| ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER |
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44 |
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8.1
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Termination |
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44 |
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8.2
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Procedure
and Effect of Termination |
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45 |
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8.3
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Amendment
and Modification |
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45 |
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| ARTICLE IX SURVIVAL OF REPRESENTATIONS;
INDEMNIFICATION |
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46 |
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9.1
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Survival
of Representations |
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46 |
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9.2
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WIN’s Agreement to Indemnify |
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46 |
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9.3
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WIN’s Limitation of Liability |
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47 |
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9.4
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WCAS
Subs’ Agreement to Indemnify |
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47 |
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9.5
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WCAS
Subs’ Limitation of Liability |
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47 |
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9.6
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Procedures for Indemnification With Respect to Third-Party
Claims |
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48 |
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9.7
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Other
Claims |
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49 |
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9.8
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Sole
Remedy. |
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49 |
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9.9
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Exclusivity of Tax Sharing Agreement |
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50 |
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| ARTICLE X MISCELLANEOUS |
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50 |
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10.1
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Fees and
Expenses |
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50 |
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10.2
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Further
Assurances |
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51 |
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10.3
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Notices |
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51 |
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10.4
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Entire
Agreement |
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52 |
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10.5
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Severability |
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52 |
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10.6
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Binding
Effect; Assignment |
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52 |
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10.7
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No
Third-Party Beneficiaries |
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52 |
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10.8
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Counterparts |
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52 |
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10.9
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Interpretation |
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52 |
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10.10
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Jurisdiction; Waiver of Jury Trial |
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53 |
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10.11
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Governing
Law |
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53 |
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10.12
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Specific
Performance |
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54 |
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10.13
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Waivers |
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54 |
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10.14
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The
Parents’ Guaranty |
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54 |
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10.15
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Defined
Terms |
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55 |
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| SCHEDULE I RESTRUCTURING TRANSACTIONS |
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I-1 |
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| SCHEDULE II EXCHANGED WIN SHARES |
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II-1 |
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EXHIBIT A PUBLISHING AGREEMENT
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EXHIBIT B WIN TRANSITION SERVICES AGREEMENT
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EXHIBIT C BILLING AGREEMENT
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EXHIBIT D1 LEASE AGREEMENT (MATTHEWS, NORTH
CAROLINA)
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EXHIBIT D2 LEASE AGREEMENT (LINCOLN, NEBRASKA)
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EXHIBIT E TAX SHARING AGREEMENT
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EXHIBIT F HOLDINGS EXCHANGE DEBT
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iii
SHARE EXCHANGE
AGREEMENT
AMENDED AND RESTATED SHARE
EXCHANGE AGREEMENT, dated as of August 16, 2006 (the “
Agreement ”), by and among WINDSTREAM CORPORATION, a
Delaware corporation (“ WIN ”), WELSH, CARSON,
ANDERSON & STOWE VIII, L.P., a Delaware limited
partnership, WELSH, CARSON, ANDERSON & STOWE IX, L.P., a
Delaware limited partnership, WCAS CAPITAL PARTNERS III, L.P., a
Delaware limited partnership (each a “ Parent ”
and collectively, the “ Parents ”), REGATTA
HOLDING I, L.P., a Delaware limited partnership, REGATTA HOLDING
II, L.P., a Delaware limited partnership, REGATTA HOLDING III,
L.P., a Delaware limited partnership (each a “ WCAS
Sub ” and together the “ WCAS Subs
”).
RECITALS
WHEREAS, WIN is engaged
through its indirect wholly-owned subsidiary, Windstream Yellow
Pages, Inc., an Ohio corporation (the “ Company
”), and the Company’s wholly-owned subsidiary,
Windstream Listing Management, Inc., a Pennsylvania corporation
(“ WLM ” and, together with the Company, the
“ Division Subsidiaries ”) in the business of
designing, publishing, marketing, distributing and selling
advertising in print, Internet and other directories in the United
States (the “ Division ”);
WHEREAS, WIN is the record
and beneficial owner of all of the shares of common stock, par
value $0.01 per share (the “ Holdings Shares ”),
of Windstream Regatta Holdings, Inc., a Delaware corporation newly
formed by WIN for the purpose of engaging in the transactions
contemplated hereby (“ Holdings ”);
WHEREAS, at or prior to the
Closing (as defined herein) of the transactions contemplated
hereby, (i) pursuant to certain restructuring transactions, as
more fully described in Schedule I attached hereto,
including one or more distributions and/or contributions of assets
and/or equity securities, WIN will contribute, or cause to be
contributed, to the Division Subsidiaries certain assets and
liabilities related to the business of the Division and will cause
the stock of the Company to be held directly by WIN (collectively,
the “ Restructuring Transactions ”), and
(ii) WIN will contribute, or cause to be contributed, to
Holdings all of the issued and outstanding capital stock of the
Company and certain other assets such that, from and after
consummation of such restructuring transactions and contributions,
all of the right, title and interest in and to all of the
(1) assets, properties and rights primarily used by or
primarily held for use in and (2) liabilities primarily
associated with, in each case, the operation of the business of the
Division, will be held, directly or indirectly, by Holdings, and in
exchange for the contribution to Holdings, directly or indirectly,
of all of the issued and outstanding capital stock of the Company,
Holdings will issue to WIN the Holdings Shares, distribute to WIN
the Holdings Exchange Debt (as defined herein) and pay to WIN the
Special Dividend (as defined herein) (which WIN intends to
distribute to stockholders and/or transfer to creditors in
pursuance of the plan of reorganization that includes the
Contribution) all upon the terms and subject to the conditions set
forth herein (the transactions described in this clause
(ii) are collectively referred to herein as the “
Contribution ”);
WHEREAS, following the
consummation of the Restructuring Transactions and the
Contribution, upon the terms and subject to the conditions set
forth in this Agreement, at the Closing each WCAS Sub will transfer
to WIN the number of shares of common stock, par value $0.0001 per
share, of WIN (“ WIN Common Stock ”) set forth
opposite such WCAS Sub’s name on Schedule II attached
hereto in exchange for the number of Holdings Shares set forth
opposite such WCAS Sub’s name on Schedule II attached
hereto;
WHEREAS, the parties to this
Agreement intend that the Contribution, together with the Debt
Exchange (as defined herein), will qualify as a tax-free
reorganization under Section 368 of the Internal Revenue Code
of 1986, as amended (the “ Code ”), that the
exchange of the shares of WIN Common Stock held by each WCAS Sub
for the Holdings Shares at the Closing will constitute a
tax–free distribution of securities pursuant to
Section 355 of the Code, and that this Agreement, together
with all Ancillary Agreements, will constitute a “plan of
reorganization” within the meaning of Sections 361 and 368 of
the Code;
WHEREAS, the respective
boards of directors or comparable authorized Person or body of WIN
and each WCAS Sub have approved this Agreement and the respective
boards of directors of WIN, Holdings and each WCAS Sub have
approved the transactions contemplated hereby, and all necessary
approvals of WIN, as the sole stockholder of Holdings have been
obtained;
WHEREAS, on December 12,
2006, the parties hereto entered into a Share Exchange Agreement
providing for the transactions contemplated hereby (the “
Initial Agreement ”) and such parties wish to enter
into this Agreement, as of the date hereof, to amend and restate,
and supersede in its entirety, the Initial Agreement;
and
WHEREAS, capitalized terms
used herein and not otherwise defined shall have the respective
meanings ascribed to such terms in Section 10.15
hereof.
TERMS
ARTICLE I
EXCHANGE
1.1 Transfer of Holdings
Shares . Upon the terms and subject to the conditions of this
Agreement, at the closing provided for in Section 1.3 hereof
(the “ Closing ”), WIN shall convey, assign,
transfer and deliver to each WCAS Sub, and each such WCAS Sub shall
receive and accept from WIN, all of WIN’s right, title and
interest in and to the Holdings Shares set forth opposite such WCAS
Sub’s name on Schedule II attached hereto, free
and clear of all liens, encumbrances, security interests,
mortgages, pledges, claims and options (collectively, “
Liens ”).
1.2 Transfer of Exchanged
WIN Shares . Upon the terms and subject to the conditions of
this Agreement, in consideration of the aforesaid conveyance,
assignment, transfer and delivery of the Holdings Shares at the
Closing, each WCAS Sub shall convey, assign, transfer and deliver
to WIN all of such WCAS Sub’s right, title and interest in
and to the number of shares of WIN Common Stock set forth opposite
such WCAS Sub’s name on Schedule II
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attached hereto, free and clear of all
Liens (such shares of WIN Common Stock being collectively referred
to herein as the “ Exchanged WIN Shares
”).
1.3 Closing . The
Closing of the transactions contemplated by this Agreement shall
take place at the offices of WIN at 4001 Rodney Parham Road, Little
Rock, AR 72212, at 10:00 a.m., local time, on the date designated
in writing by the Parents and the WCAS Subs pursuant to
Section 2.6(a) hereof, which date shall not be prior to
April 15, 2007 and shall be no later than sixty (60) days
after the latest to occur of (i) the receipt by Holdings, WIN
and the WCAS Subs of the Private Letter Rulings and the
satisfaction of the conditions set forth in Sections 7.1(g),
7.1(h), 7.1(i), and 7.1(j) and (ii) the date on which WIN
delivers to the WCAS Subs Audited Financial Statements for fiscal
year 2006, as contemplated by Sections 1.4(f) and 5.9 hereof;
provided that all other conditions set forth in
Article VII are already satisfied or are capable of being satisfied
at the Closing (subject to the satisfaction or waiver of all such
conditions at the Closing), or at such other place, date and time
as shall be agreed upon in writing by the parties hereto (the date
on which the Closing is so scheduled to occur, the “
Closing Date ”). Notwithstanding the foregoing, the
parties hereto intend that such Closing shall be deemed to be
effective, and the transactions contemplated by this Agreement
shall be deemed to occur simultaneously, at 11:59 p.m. on the
Business Day immediately prior to the date on which the Closing
actually occurs (the “ Effective Time
”).
1.4 Deliveries by WIN
. Prior to or at the Closing, WIN shall deliver or cause to be
delivered to each WCAS Sub the following:
(a) stock certificate(s)
representing the Holdings Shares, duly endorsed or accompanied by
stock powers duly executed in blank;
(b) any cash payment required
to be made by WIN pursuant to Section 1.6(a) hereof, by wire
transfer of immediately available funds to an account designated by
the WCAS Subs at least two (2) Business Days prior to the
Closing Date;
(c) each of the Ancillary
Agreements, duly executed by WIN or an Affiliate of WIN;
(d) the resignations of the
officers and directors of Holdings and the Division Subsidiaries
specified by the WCAS Subs in the notice delivered by the WCAS Subs
pursuant to Section 2.3 hereof;
(e) evidence that all Liens
(other than Permitted Liens) on all properties and assets of the
Division Subsidiaries have been terminated;
(f) audited consolidated
balance sheets of the Division as of December 31, 2006,
December 31, 2005 and December 31, 2004, and related
audited consolidated statements of income and cash flows of the
Division for the twelve-month periods then ended (collectively, the
“ Audited Financial Statements ”);
(g) the officer’s
certificate referred to in Section 7.3(c) hereof;
and
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(h) all other documents,
certificates, instruments or writings required to be delivered by
WIN at or prior to the Closing pursuant to this
Agreement.
1.5 Deliveries by the WCAS
Subs . Prior to or at the Closing, the WCAS Subs shall deliver
or cause to be delivered to WIN the following:
(a) stock certificate(s)
representing the Exchanged WIN Shares, duly endorsed or accompanied
by stock powers duly executed in blank;
(b) any cash payment required
to be made by Holdings pursuant to Section 1.6(a) hereof, by
wire transfer of immediately available funds to an account
designated by WIN at least two (2) Business Days prior to the
Closing Date;
(c) each of the Ancillary
Agreements to which each WCAS Sub is a party, duly executed by each
WCAS Sub;
(d) the officer’s
certificate referred to in Section 7.2(c) hereof;
and
(e) all other documents,
certificates, instruments or other writings required to be
delivered by the WCAS Subs at or prior to the Closing pursuant to
this Agreement.
1.6 Net Working Capital
Calculation and Adjustment .
(a) WIN shall, at least two
(2) Business Days prior to the Closing Date, cause to be
prepared and delivered to Holdings, with a copy to the WCAS Subs, a
statement setting forth WIN’s good faith estimate as of the
Effective Time of (i) the Net Working Capital of the Division
(the “ Estimated Net Working Capital ”) and the
components and calculation thereof; and (ii) the Division
Indebtedness (the “ Estimated Division Indebtedness
”). As used herein, “ Net Working Capital
” shall mean (A) the sum of all current assets (other
than (i) unbilled receivables, (ii) intercompany accounts
receivable and (iii) directories in process) of the Division,
as well as any Holdings Financing Expenses that have been incurred
or paid by or on behalf of WIN or any of its Subsidiaries or
Affiliates prior to the Effective Time, other than any such
Holdings Financing Expenses that will remain liabilities or
obligations of Holdings or the Division Subsidiaries after the
Effective Time, less (B) the sum of all current liabilities
(other than (i) all affiliates payable, including dividends
accrued, (ii) publishing rights, and (iii) other deferred
revenue), including any WIN Transaction Expenses that will remain
liabilities or obligations of Holdings or the Division Subsidiaries
after the Effective Time, but excluding any Holdings Financing
Expenses that will remain liabilities or obligations of Holdings or
the Division Subsidiaries after the Effective Time), of the
Division, in each case determined in all respects in accordance
with GAAP and in a manner consistent with all accounting
principles, practices, methodologies and policies used in the
preparation of the Financial Statements. For the avoidance of
doubt, Net Working Capital shall be calculated prior to the
application of any purchase accounting adjustments. If the
Estimated Net Working Capital is greater than the Target Net
Working Capital, then Holdings shall pay to WIN an amount in cash
at the Closing equal to such excess; or (B) if the Estimated
Net Working Capital is less than the Target Net Working Capital,
then WIN shall pay to Holdings an amount in cash at the Closing
equal to such
4
deficit. WIN shall also pay
to Holdings an amount in cash at the Closing equal to the Estimated
Division Indebtedness.
(b) Within sixty
(60) days after the Closing Date, Holdings shall cause to be
prepared and delivered to WIN, with a copy to the WCAS Subs, a
statement (the “ Statement ”) setting forth
(i) the Net Working Capital, as of the Effective Time (the
“ Actual Net Working Capital ”) and the amount
by which the Actual Net Working Capital (A) exceeds the
Estimated Net Working Capital (any such excess amount, the “
Working Capital Excess Amount ”) or (B) is less
than the Estimated Net Working Capital (any such deficiency amount,
the “ Working Capital Deficiency Amount ”); and
(ii) the Division Indebtedness, as of the Effective Time (the
“ Actual Division Indebtedness ”) and the amount
by which the Actual Division Indebtedness (A) exceeds the
Estimated Division Indebtedness (any such excess amount, the
“ WIN Division Indebtedness Excess Amount ”) or
(B) are less than the Estimated Division Indebtedness (any
such deficiency amount, the “ WIN Division Indebtedness
Deficiency Amount ”). Subject to Sections 1.6(c),
(d) and (e) hereof, (i) Holdings shall, and the WCAS
Subs shall cause Holdings to, pay to WIN the amount of any Working
Capital Excess Amount and/or WIN Division Indebtedness Deficiency
Amount and (ii) WIN shall pay to Holdings the amount of any
Working Capital Deficiency Amount or any WIN Division Indebtedness
Excess Amount, in each case, as finally determined pursuant to this
Section 1.6. To the extent that netting the payments
referenced in the preceding sentence results in a net payment by
Holdings to WIN, the amount of such net payment shall be referred
to herein as the “ Excess Amount ” and, to the
extent that netting the payments referenced in the preceding
sentence results in a net payment by WIN to Holdings, the amount of
such net payment shall be referred to herein as the “
Deficiency Amount .” The Statement shall be prepared
in accordance with GAAP utilizing the accounting principles,
practices, methodologies and policies used in the preparation of
the Financial Statements.
(c) After receipt of the
Statement, WIN shall have twenty (20) Business Days to review
the Statement together with the workpapers used in its preparation.
The Statement shall become final, conclusive and binding upon the
parties on the twentieth Business Day following receipt thereof by
WIN unless WIN gives written notice of its disagreement (a “
Notice of Disagreement ”) to Holdings prior to such
date. Holdings shall, and the WCAS Subs shall cause Holdings to,
give WIN and its representatives reasonable access, during normal
business hours of Holdings, to all personnel, books and records of
the Division as reasonably requested by WIN to assist it in its
preparation of the Notice of Disagreement. Any Notice of
Disagreement shall (i) specify in reasonable detail the nature
and amount of any disagreement so asserted, (ii) WIN’s
calculation of the Net Working Capital as of the Effective Time,
and (iii) WIN’s calculation of the amount of Division
Indebtedness as of the Effective Time. In the event that WIN
delivers a Notice of Disagreement to Holdings within the foregoing
twenty (20) Business Day period, then the Statement shall
become final, conclusive and binding upon the parties hereto on the
date such parties resolve in writing any differences they have with
respect to any matter properly included in the Notice of
Disagreement pursuant to the dispute resolution procedures set
forth herein or by mutual agreement of the parties. During the
twenty (20) Business Days immediately following the receipt by
Holdings of a Notice of Disagreement, the respective Chief
Financial Officers of Holdings and WIN shall negotiate in good
faith to resolve any issues properly included in a Notice of
Disagreement. During such period, Holdings shall have full access
to the work papers of WIN prepared in connection with WIN’s
preparation of
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the Notice of Disagreement.
At the end of such 20-Business Day period, at the request of WIN or
Holdings, any and all matters which remain in dispute and which
were included in the Notice of Disagreement shall be submitted to
KPMG LLP (the “ Accounting Firm ”) for a binding
resolution. The fees and expenses of the Accounting Firm shall be
paid one-half by WIN and one-half by Holdings and the WCAS
Subs.
(d) The Accounting Firm shall
determine and report in writing to WIN and Holdings, with a copy to
the WCAS Subs, as to the resolution of all disputed matters
submitted to the Accounting Firm and the effect of such
determinations on the Statement within ten (10) Business Days
after such submission or such longer period as the Accounting Firm
may reasonably require, and such determinations shall be final,
conclusive and binding as to WIN, Holdings and their respective
Affiliates, including the WCAS Subs. In resolving any disputed
item, the Accounting Firm, acting in the capacity of an expert
and not as an arbitrator: (i) shall limit its review to
matters specifically set forth in such Notice of Disagreement
delivered pursuant to Section 1.6(c) as a disputed item (other
than matters thereafter resolved by mutual written agreement
of WIN and Holdings), (ii) shall further limit its review to
whether the calculation of any such disputed item is
mathematically accurate and has been prepared in accordance
with GAAP utilizing the accounting principles, practices,
methodologies and policies used in preparation of the Financial
Statements, and (iii) shall not assign a value to any item
greater than the greatest value for such item claimed by any party
or less than the smallest value for such item claimed by any other
party in the Statement or the Notice of Disagreement delivered
pursuant to Section 1.6(c). WIN and Holdings shall, and the
WCAS Subs shall cause Holdings to, each furnish to
the Accounting Firm such workpapers and other documents
and information relating to the disputed issues, and shall provide
interviews and answer questions, as the Accounting Firm may
reasonably request.
(e) At such time as the
Statement becomes final, conclusive and binding upon WIN, Holdings
and their respective Affiliates, including the WCAS Subs, in
accordance with this Section 1.6, the Statement shall become
the “ Conclusive Statement ”. If the Conclusive
Statement contains a Deficiency Amount, then WIN shall pay to
Holdings an amount in cash equal to such Deficiency Amount. If the
Conclusive Statement contains an Excess Amount, then Holdings
shall, and the WCAS Subs shall cause Holdings to, pay to WIN an
amount in cash equal to such Excess Amount. All payments to be made
pursuant to this Section 1.6 shall be made on the second
Business Day following the date on which the Statement becomes the
Conclusive Statement pursuant to this Section 1.6. Any payment
required to be made by WIN or Holdings pursuant to this
Section 1.6 shall bear interest from the date such payment is
finally determined pursuant to Section 1.6(c) or (e), as
applicable, through the date of payment at the Interest Rate, and
shall be payable by wire transfer of immediately available funds to
an account or accounts designated by the party entitled to receive
such funds prior to the date when such payment is due.
(f) For purposes of this
Agreement, Taxes (including deferred Tax assets and liabilities)
shall not be included as assets or liabilities for purposes of
determining Estimated Net Working Capital or Actual Net Working
Capital. Liabilities, assets, pre-payments, refunds and credits
with respect to Taxes shall be governed by and allocated solely in
accordance with the Tax Sharing Agreement.
6
ARTICLE II
RELATED
MATTERS
2.1 Ancillary
Agreements . Prior to or at the Closing, WIN and the WCAS Subs
(or the respective Subsidiaries or Affiliates of WIN and the WCAS
Subs identified in the clauses below) shall enter into the
following ancillary agreements, substantially in the form of the
agreements set forth in Exhibit A , Exhibit B ,
Exhibit C , Exhibits D1 and D2 and Exhibit E ,
respectively[, it being acknowledged and agreed that certain
exhibits and schedules to, and terms and provisions of (including
the list of transition services to be provided under the WIN
Transition Services Agreement), the forms of Ancillary Agreements
attached to this Agreement, as and to the extent noted in such
Exhibits, are preliminary in nature and the Parties shall use their
respective reasonable best efforts to develop and agree upon
definitive versions of such exhibits, schedules, terms and
provisions prior to the Closing:
(a) Publishing Agreement
among WIN, the WCAS Subs and the Company, substantially in the form
of the agreement set forth in Exhibit A attached hereto,
pursuant to which, among other things, WIN will name the Company as
its exclusive official print directory publisher of print listings
and classified advertisements of its wireline telephone customers
in the geographic areas in which WIN or its Affiliates are the
incumbent telecom provider as of the date of this Agreement for a
period of 50 years, all upon the terms and subject to the
conditions set forth therein (the “ Publishing
Agreement ”);
(b) Transition Services
Agreement between WIN (or one or more of its designated Affiliates)
and one or more of the Division Subsidiaries, substantially in the
form of the agreement set forth in Exhibit B attached
hereto, pursuant to which, among other things, WIN will provide, or
cause to be provided, to the Division certain transition services,
as set forth therein, for the time periods set forth therein, upon
the terms and subject to the conditions set forth therein (the
“ WIN Transition Services Agreement
”);
(c) Billing and Collection
Agreement between Windstream Communications, Inc. and one or more
of the Division Subsidiaries, substantially in the form of the
agreement set forth in Exhibit C attached hereto, pursuant
to which, among other things, WIN will provide, or cause to be
provided, to the Division certain billing services (including
certain limited pre-delinquency collection services), as set forth
therein, for the time periods set forth therein, upon the terms and
subject to the conditions set forth therein (the “ Billing
Agreement ”);
(d) Lease Agreements between
WIN (or one or more of its designated Affiliates) and one or more
of the Division Subsidiaries, substantially in the form of the
agreements set forth in Exhibits D1 and D2 attached hereto,
pursuant to which, among other things, WIN will lease to the
Division certain Real Property (the “ Lease Agreements
”); and
(e) Tax Sharing Agreement
among WIN, Holdings and the WCAS Subs, substantially in the form of
the agreement set forth in Exhibit E attached hereto,
pursuant to which, among other things, WIN, Holdings and the WCAS
Subs will agree upon the allocation of responsibility for certain
Taxes arising before and after the Effective Time, agree to
indemnify
7
each other for certain
related liabilities and provide for certain covenants and
agreements relating to Taxes (the “ Tax Sharing
Agreement ” and, collectively with the Publishing
Agreement, the WIN Transition Services Agreement, the Billing
Agreement and the Lease Agreements, the “ Ancillary
Agreements ”).
2.2 Intercompany
Obligations; Affiliate Agreements; Certain Other Intercompany
Matters .
(a) Except as set forth on
Section 2.2(a) of the disclosure letter delivered by WIN to
the WCAS Subs contemporaneously with the execution of this
Agreement and attached hereto and made a part hereof (the “
Disclosure Letter ”), as of the Closing Date, WIN,
Holdings and any Division Subsidiaries shall cause all Intercompany
Agreements to be terminated in all respects such that there is no
cost or liability thereunder on the part of Holdings or any
Division Subsidiary.
(b) In furtherance and not in
limitation of subsection (a) of this Section 2.2 or any
other provision of this Agreement, all Intercompany Indebtedness
outstanding on the date hereof and not repaid at or prior to the
Closing or incurred after the date hereof and not repaid at or
prior to Closing shall be cancelled, or, at WIN’s election,
contributed to Holdings or one of the Division Subsidiaries,
immediately prior to the Closing such that, at the Effective Time,
no such Intercompany Indebtedness shall be outstanding. As used
herein, the term “ Intercompany Indebtedness ”
shall mean, without duplication, (a) the aggregate principal
amount of all indebtedness for borrowed money, including all
indebtedness evidenced by a note, bond, debenture or similar
instrument, together with accrued and unpaid interest thereon, and
(b) all accounts payable, in each case, between Holdings or
any Division Subsidiary, on the one hand, and WIN or any of its
Subsidiaries or Affiliates (other than Holdings or any Division
Subsidiary), on the other hand.
(c) Except as provided in the
Ancillary Agreements or as set forth on Section 2.2(c) of the
Disclosure Letter, on or prior to the Closing Date, all data
processing, accounting, insurance, banking, personnel, legal, tax,
communications and other products or services provided to Holdings
or any Division Subsidiary (i) by WIN or any of its
Subsidiaries or Affiliates (other than Holdings or any Division
Subsidiary), (ii) pursuant to any contract between WIN or any
of its Subsidiaries or Affiliates (other than Holdings or any
Division Subsidiary) and any third party under which goods or
services are provided to any Division Subsidiary and which would
constitute a Material Contract if any Division Subsidiary were a
party to or bound by such contract as of the date hereof, or
(iii) by Holdings or either Division Subsidiary to WIN or any
of its Subsidiaries or Affiliates (other than Holdings or any other
Division Subsidiary), including any agreements or understandings
(written or oral) with respect thereto, will terminate or (in the
case of clause (ii) above), subject to receiving any required
consents , be assigned in whole (in the case of contracts
relating solely to the business of the Division Subsidiaries) or in
part (in the case of contracts not relating solely to the business
of the Division Subsidiaries) to one or more of the Division
Subsidiaries. On and after the Closing Date, the WCAS Subs shall be
solely responsible for the operation of the Division, except as
otherwise specifically provided in the WIN Transition Services
Agreement or any of the other Ancillary Agreements.
8
2.3 Resignations . At
the Closing, to the extent requested in writing by the WCAS Subs at
least five (5) Business Days prior to the Closing Date, WIN
shall cause to be delivered to the WCAS Subs and the Company duly
executed resignations from the officers and directors of Holdings
and each Division Subsidiary specified by the WCAS Subs, effective
as of the Closing, and shall take such other action as is necessary
to accomplish the foregoing.
2.4 Guaranties . WIN
shall use its commercially reasonable efforts to cause the release
in respect of all obligations of Holdings or the Division
Subsidiaries under each of the guaranties, letters of credit and
similar obligations of Holdings or the Division Subsidiaries
(including leases of real and personal property) for the benefit of
WIN or any of its Subsidiaries or Affiliates (other than Holdings
or the Division Subsidiaries) or any supplements, amendments or
modifications thereto in accordance with this Agreement
(collectively, the “ Guaranties ”), all of which
Guaranties are set forth in Section 2.4 of the Disclosure
Letter. WIN shall take all actions that are necessary to comply
with this Section 2.4 as promptly as practicable after the
date hereof and shall keep the WCAS Subs reasonably informed of any
developments associated therewith. Section 2.4 of the
Disclosure Letter sets forth a list of all Guaranties of Holdings
or the Division Subsidiaries.
2.5 Related
Transactions .
(a) At or prior to the
Effective Time, WIN shall, or shall cause its Subsidiaries to,
consummate the following related transactions:
(i) WIN shall consummate the
Restructuring Transactions and the Contribution;
(ii) In consideration of the
Contribution, WIN shall cause Holdings to issue to WIN certain debt
obligations of Holdings, having substantially the terms set forth
in Exhibit F attached hereto (the “ Holdings
Exchange Debt ”), in an aggregate principal amount equal
to Two-Hundred Fifty Million Five Hundred Thousand Dollars
($250,500,000) less the amount of the Special Dividend paid
by Holdings to WIN pursuant to Section 2.5(a)(iii) hereof;
and
(iii) WIN shall cause
Holdings to distribute to WIN, as a special dividend (the “
Special Dividend ”), cash in an amount not in excess
of WIN’s tax basis in the Division Subsidiaries as of the
date of such Special Dividend (which WIN intends to distribute to
its stockholders and/or transfer to creditors in pursuance of the
plan of reorganization that includes the Contribution), as set
forth in a written notice to be delivered by WIN to Holdings and
the WCAS Subs not less than 40 days prior to the
Closing.
(b) At or prior to the
Effective Time, but after completion of the actions contemplated in
Section 2.5(a) hereof, WIN shall use its reasonable best
efforts to: (i) enter into all necessary or appropriate
arrangements regarding the exchange of, and, provided an exchange
agreement is entered into among WIN and holders of outstanding WIN
Debt, effect the exchange of, the Holdings Exchange Debt for
outstanding WIN debt obligations (the “ WIN Debt
”) held by one or more creditors of WIN (the “ Debt
Exchange ”); (ii) enter into all
necessary
9
or appropriate arrangements
regarding the sale of, and effect the sale of, the WIN Debt
expected to be received by WIN in the Debt Exchange for cash in an
amount equal to the aggregate Fair Market Value of the WIN Debt as
of the date of such sale; and (iii) immediately thereafter use
the cash proceeds expected to be received by WIN pursuant to clause
(ii) immediately above to retire such WIN Debt.
2.6 Coordination of
Holdings Financing and Debt Exchange .
(a) WIN and the WCAS Subs
shall, and the Parents shall cause the WCAS Subs to, cooperate with
respect to and use their respective reasonable best efforts to
effect the issuance and expected subsequent sale by creditors of
WIN of the Holdings Exchange Debt, the implementation of a new
senior credit agreement for Holdings pursuant to which the Holdings
Exchange Debt may be incurred (the “ Holdings Credit
Agreement ”) and/or the issuance and sale of certain
Senior Subordinated Notes of Holdings, in each case, substantially
on the terms set forth in Exhibit F attached hereto, and the
issuance and sale of such Indebtedness of Holdings as may be
necessary or desirable in order to enable Holdings to pay the
Special Dividend and WIN to consummate the Debt Exchange
(collectively, the “ Holdings Financing ”). The
WCAS Subs shall be responsible for the selection of the lenders
under the Holdings Credit Agreement, the syndication and placement
of the Holdings Exchange Debt or, if applicable, the selection of
the initial purchasers for the offering and placement of the
Holdings Exchange Debt and the negotiation of all related
documentation, including the preparation of all offering memoranda,
private placement memoranda, prospectuses and similar documents
deemed reasonably necessary by the WCAS Subs to be used in
connection with consummating the Holdings Financing and the
expected sale of the Holdings Exchange Debt. WIN shall be
responsible, in coordination with the WCAS Subs, for the
identification and selection of the WIN creditors with which any
Debt Exchange shall be effected and the preparation of all related
documentation; provided , however , that the terms of
the Debt Exchange, including all related documentation, the
aggregate principal amount of WIN Indebtedness to be received by
WIN in exchange for the Holdings Exchange Debt and all other
material terms and conditions of the Debt Exchange shall be
negotiated solely by WIN; and provided further , that
the Debt Exchange shall be effected in all respects in a manner
consistent with the terms of the Private Letter Rulings; and
provided further that the WCAS Subs shall not be
deemed to act as agents of WIN in connection with the Debt
Exchange. WIN, each of the Parents and each of the WCAS Subs hereby
acknowledge and agree that (i) Holdings shall incur the
Holdings Exchange Debt, in consideration of the Contribution, on
such date as the WCAS Subs shall designate following the latest to
occur of (A) receipt by WIN, Holdings and the WCAS Subs of the
Private Letter Rulings and the satisfaction of the conditions set
forth in Sections 7.1(g), 7.1(h), 7.1(i), and 7.1(j) hereof and
(B) the date on which WIN delivers to the WCAS Subs Audited
Financial Statements for fiscal year 2006, as contemplated by
Sections 1.4(f) and 5.9 hereof, but in any event within sixty
(60) days thereafter (with the Parents and the WCAS Subs to
notify WIN in writing of the projected Closing Date not less than
five (5) Business Days prior thereto, provided, however, that,
notwithstanding the foregoing, the Closing shall not take place
prior to April 15, 2007), and (ii) the Holdings Exchange
Debt shall be issued on such terms as will enable WIN, upon receipt
of the Holdings Exchange Debt, to exchange such Holdings Exchange
Debt for an equivalent Fair Market Value of WIN Indebtedness held
by WIN’s creditors. Without limiting the generality of this
Section 2.6(a), WIN shall, and WIN shall cause Holdings to,
issue the Holdings Exchange Debt in accordance with the immediately
preceding sentence, subject to the
10
responsibilities of the WCAS
Subs set forth in the second sentence of this Section 2.6(a).
The parties hereto further acknowledge and agree that Holdings
shall issue the Holdings Exchange Debt on such prevailing terms,
including with respect to applicable interest rate and covenants,
as are then available, and adverse changes in such prevailing terms
shall not excuse any of the parties from proceeding with the
issuance of the Holdings Exchange Debt in accordance with this
Section 2.6(a).
(b) WIN shall, and shall
cause Holdings and each of the Division Subsidiaries to, use its
reasonable best efforts to cause the respective employees,
accountants, counsel and other representatives of WIN and Holdings
to reasonably cooperate with the WCAS Subs and their
representatives in carrying out the transactions contemplated by
the Holdings Financing and in delivering all documents and
instruments deemed reasonably necessary by the WCAS Subs (including
providing standard accountants’ “comfort” letters
and legal opinions and otherwise cooperating and assisting in
satisfying the conditions to the Holdings Financing and assisting
with the consummation of the Holdings Financing, including by
(i) participating in meetings, drafting sessions, due
diligence sessions, management presentation sessions, “road
shows” and sessions with rating agencies in connection with
the syndication or marketing of the Holdings Credit Agreement and
the expected consummation of the placement and sale of the Holdings
Exchange Debt received by the exchanging creditors in the Debt
Exchange and any other debt securities of Holdings that may be
issued or sold to finance the payment of the Special Dividend
(collectively, the “ Holdings Debt Offering ”),
(ii) providing direct contact between prospective lenders and
the officers and directors of each of WIN and Holdings,
(iii) preparing business projections and financial statements,
(iv) assisting in the preparation by the WCAS Subs of offering
memoranda, private placement memoranda, prospectuses and similar
documents deemed reasonably necessary by the WCAS Subs to be used
in connection with consummating the Holdings Financing,
(v) executing and delivering all documents and instruments
deemed reasonably necessary by the WCAS Subs, including any
underwriting or placement agreements, pledge and security
documents, other definitive financing documents, including any
indemnity agreements, or other requested certificates or documents,
legal opinions, engineering reports, environmental assessment
reports, surveys and title insurance as may be reasonably requested
by the WCAS Subs, providing that Holdings and the Division
Subsidiaries, and not WIN, shall enter into the agreements and
instruments contemplated by this clause (v), (vi) disclosing
the Holdings Financing, as required under the Securities Act and
the Exchange Act, in any registration statement and any other
filings to be made with the Securities and Exchange Commission, and
(vii) taking all other actions reasonably necessary in
connection with the Holdings Financing). Notwithstanding anything
to the contrary contained herein, the expected sale by WIN
creditors of the Holdings Exchange Notes shall be in a transaction
exempt from the registration requirements of the Securities Act
and, prior to the Effective Time, Holdings shall not be required
to, and WIN shall have no obligation to cause Holdings to, register
the WIN Exchange Notes or any other Holdings Debt Securities under
the Securities Act.
2.7 Private Letter
Rulings . WIN shall, and WIN shall cause Holdings and the
Division Subsidiaries to, and the WCAS Subs shall, use their
respective reasonable best efforts to obtain the Private Letter
Rulings, substantially on the terms set forth in, and otherwise in
accordance with, the Tax Sharing Agreement, as soon as practicable
after the date of this Agreement. WIN and Holdings shall be
responsible in the first instance for the preparation of all
memoranda, ruling requests, correspondence and other submissions to
the IRS in connection
11
with obtaining the Private Letter
Rulings; provided that the WCAS Subs shall be responsible in the
first instance for the preparation of all memoranda, ruling
requests, correspondence and other submissions to the IRS that
relate principally to those portions of the Private Letter Rulings
that pertain principally to the WCAS Subs. Each party shall have
the right to be provided a reasonable period in advance of
submission, to review, and to approve, materials prepared by the
other party, such approval not to be unreasonably withheld, delayed
or conditioned. Each party shall provide the other party with
copies of all memoranda, ruling requests, correspondence or other
submissions as filed with the IRS promptly following the filing
thereof. Each of WIN and the WCAS Subs shall have the right to
participate fully in the process of obtaining the Private Letter
Rulings, including attending meetings and participating in
conference calls with the IRS. Each of WIN, on the one hand, and
the WCAS Subs, on the other hand, shall use its reasonable best
efforts to cause its respective employees, accountants, counsel and
other representatives reasonably to cooperate with the other party
and its representatives in obtaining the Private Letter Rulings,
including by (i) participating in meetings and conference
calls with the IRS, (ii) assisting in the preparation of all
memoranda, ruling requests, correspondence and other submissions
that are deemed reasonably necessary or desirable by either party
in connection with obtaining the Private Letter Rulings,
(iii) executing and delivering customary documents and
instruments (such as penalties of perjury statements) that are
deemed reasonably necessary by either party in connection with
obtaining the Private Letter Rulings, and (iv) taking other
actions reasonably necessary in connection with obtaining the
Private Letter Rulings.
2.8 Termination of Forward
Underwriting Commitment . In the event that the IRS determines
pursuant to, or in connection with its consideration of, one or
more of the Private Letter Rulings requested from the IRS pursuant
to Section 2.7 that the Forward Underwriting Commitment
contemplated under the Commitment Letter is inconsistent with such
Private Letter Ruling(s) or that the IRS will not be able to issue
any or all of the Private Letter Rulings to the extent that the
Forward Underwriting Commitment is in effect, then the WCAS Subs
shall terminate, and the Parents shall cause the WCAS Subs to
terminate, the Commitment Letter effective immediately, such that
the Parties will proceed with the transactions contemplated by this
Agreement without the benefit of the Forward Underwriting
Commitment.
2.9 Repayment of Division
Indebtedness . Prior to or at the Effective Time, WIN shall
repay, or cause to be repaid, or assume, or cause to be assumed,
all Indebtedness of Holdings and the Division Subsidiaries other
than the Holdings Exchange Debt and any other Indebtedness incurred
by Holdings in order to enable Holdings to pay the Special
Dividend.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF WIN
Except as set forth in the
Disclosure Letter (as updated pursuant to Section 5.7 hereof)
(with specific reference to the particular Section or subsection of
this Agreement to which the information set forth in such
disclosure letter relates; provided , that any information
set forth in one section of the Disclosure Letter shall be deemed
to apply to each other Section or subsection thereof or hereof to
which its relevance is readily apparent on its face), WIN hereby
represents and warrants to the WCAS Subs and the Parents as of
the date of the Initial Agreement (except to the extent any such
representation or warranty is made as of an earlier
12
date, in which case, as of such earlier
date) and as of the Closing Date (as though then
made and as though the Closing Date were substituted for the
date of this Agreement throughout this Article III, except to the
extent any such representation or warranty is made as of an earlier
date, in which case, as of such earlier date) as
follows:
3.1 Authority . WIN
has all requisite corporate power and corporate authority to enter
into this Agreement, and WIN, Holdings and each of the Division
Subsidiaries have all requisite corporate power and authority to
enter into such of the Ancillary Agreements to which they are
respectively party and to perform their obligations hereunder and
thereunder and WIN, Holdings and each of the Division Subsidiaries
have all requisite corporate power and authority to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance by WIN of this Agreement and by WIN,
Holdings and each of the Division Subsidiaries of such Ancillary
Agreements to which they are respectively a party, and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the
part of WIN, Holdings and each such Division Subsidiary, as
applicable. This Agreement has been (and each such Ancillary
Agreement upon execution and delivery will be) duly executed and
delivered by each such party thereto and constitutes (and each such
Ancillary Agreement, upon execution and delivery, will constitute)
a valid and binding obligation of WIN, Holdings and the Division
Subsidiary party thereto, as applicable, enforceable against WIN,
Holdings or such Division Subsidiary, as applicable, in accordance
with its and their respective terms, except that (i) such
enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other Laws, now
or hereafter in effect, relating to or limiting creditors’
rights generally and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
3.2 Title to Holdings
Shares . WIN has good and valid title to the Holdings Shares,
free and clear of all Liens, and upon delivery to the WCAS Subs at
the Closing of certificates representing the Holdings Shares, duly
endorsed by WIN for transfer to the WCAS Subs or accompanied by
stock powers duly executed in blank, and upon receipt by WIN of the
Exchanged WIN Shares and any cash payment required to be made by
the WCAS Subs pursuant to Section 1.6(a) hereof, good and
valid title to the Holdings Shares will pass to each WCAS Sub,
respectively, free and clear of any Liens. Other than this
Agreement, the Holdings Shares are not subject to any voting trust
agreement or other contract, agreement, arrangement, commitment or
understanding, including any such contract, agreement, arrangement,
commitment or understanding restricting or otherwise relating to
the voting, dividend rights or disposition of the Holdings
Shares.
3.3 Organization and
Qualification . WIN, Holdings and each of the Division
Subsidiaries are, in all material respects, duly organized, validly
existing and in good standing under the Laws of the jurisdiction
listed as its jurisdiction of incorporation in Section 3.3 of
the Disclosure Letter and has all requisite corporate power and
authority to own, lease and operate the properties it owns, leases
or operates and to conduct its business as conducted on the date
hereof. WIN, Holdings and each of the Division Subsidiaries is duly
qualified or licensed to do business as a foreign corporation and
is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business
conducted by it makes such
13
qualification necessary, except in those
jurisdictions where the failure to be so duly qualified or licensed
and in good standing would not, individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse
Effect.
3.4 Capitalization of
Holdings . The authorized capital stock of Holdings consists of
10,000 shares of common stock, par value $0.01 per share, of which
1,000 shares, constituting the Holdings Shares, are validly issued
and outstanding, fully paid and nonassessable. The Holdings Shares
are owned of record and beneficially by WIN. Such Holdings Shares
have not been issued in violation of, and are not subject to, any
preemptive, subscription or similar rights. Except for the Holdings
Shares, there are no shares of capital stock or other equity
securities of Holdings outstanding. There are no outstanding
warrants, options, “phantom” stock rights, agreements,
convertible or exchangeable securities or other commitments
pursuant to which WIN or any of its Affiliates (including Holdings)
is or may become obligated to issue, sell, purchase, return or
redeem any shares of capital stock or other securities of Holdings,
or which give any Person the right to receive any benefits or
rights similar to any rights enjoyed by or accruing to the holders
of shares of capital stock of Holdings. There are no outstanding
bonds, debentures, notes or other indebtedness having the right to
vote on any matters which stockholders of Holdings may vote
upon.
3.5 Capitalization of the
Division Subsidiaries . The authorized capital stock of the
Company consists of 750 shares of common stock, par value $0.10 per
share, of which 100 shares are validly issued and outstanding,
fully paid and nonassessable (the “ Company Shares
”) and the authorized capital stock of WLM consists of 750
shares of capital stock, of which 100 shares are validly issued and
outstanding, fully paid and nonassessable (the “ WLM
Shares ” and, collectively with the Company Shares, the
“ Subsidiary Shares ”). Immediately prior to the
Closing, the Subsidiary Shares will be owned of record and
beneficially by Holdings, in the case of the Company Shares, and
the Company, in the case of the WLM Shares. Such Subsidiary Shares
have not been issued in violation of, and are not subject to, any
preemptive, subscription or similar rights. There are no
outstanding warrants, puts, calls, options, “phantom”
stock rights, agreements, convertible or exchangeable securities or
other commitments pursuant to which WIN or any of its Affiliates is
or may become obligated to issue, sell, purchase, return or redeem
any shares of capital stock or other securities of the Company or
WLM or which give any Person the right to receive any benefits or
rights similar to any rights enjoyed by or accruing to the holders
of the Subsidiary Shares. With respect to the Division
Subsidiaries, there are no outstanding bonds, debentures, notes or
other indebtedness having the right to vote on any matters which
stockholders of any of the Division Subsidiaries may
vote.
3.6 No Violation; Consents
and Approvals .
(a) Assuming receipt of those
approvals and consents set forth in Section 3.6(b) of the
Disclosure Letter, the execution and delivery by WIN of this
Agreement and by WIN, Holdings and the Division Subsidiaries of
such of the Ancillary Agreements to which WIN, Holdings and each
such Division Subsidiary is a party do not in any material respect,
and the performance of their respective obligations hereunder and
thereunder and compliance with the terms hereof and thereof will
not in any material respect, conflict with, or result in any
violation of or default under, or give rise to a right of
termination or cancellation, or result in the creation of any Lien
upon any of the material properties or assets of WIN,
Holdings
14
or the Division Subsidiaries
under, (i) any provision of the certificate of incorporation
or bylaws of WIN, Holdings or any of the Division Subsidiaries,
(ii) any material judgment, order or decree, or Law applicable
to WIN, Holdings or any of the Division Subsidiaries, or
(iii) any material note, bond, indenture, Real Property Lease,
permit, franchise or other instrument or obligation, or any
Material Contract, to which WIN, Holdings or any of the Division
Subsidiaries is a party or by or to which WIN, Holdings or any of
the Division Subsidiaries or any of their respective properties or
assets is bound or subject, but excluding any contracts, agreements
or arrangements as are listed in Section 6.2 of the Disclosure
Letter.
(b) Other than those arising
under any contracts, agreements or arrangements as are listed in
Section 6.2 of the Disclosure Letter, no material consent,
approval, order or authorization of, or registration, declaration
or filing with, any Governmental Entity, or any third party, is
required to be obtained or made by or with respect to WIN, Holdings
or any of the Division Subsidiaries in connection with the
execution and delivery of this Agreement or such of the Ancillary
Agreements to which WIN, Holdings or each such Division Subsidiary
is a party, or the consummation by WIN, Holdings or each such
Division Subsidiary of the transactions contemplated hereby,
except: (i) compliance with and filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the “ HSR Act ”) and (ii) compliance with
and filings under the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”).
3.7 Financial Statements;
Undisclosed Liabilities .
(a) Section 3.7 of the
Disclosure Letter contains the unaudited consolidated balance
sheets of the Division as of December 31, 2005 and as of
December 31, 2004 (the “ Balance Sheets ”),
and the related unaudited consolidated statements of income and
cash flows of the Division for the twelve-month periods then ended
(collectively, with the Balance Sheets, the “ Annual
Financial Statements ”). Section 3.7 of the
Disclosure Letter also contains the unaudited interim consolidated
balance sheets of the Division as of September 30, 2005 and
September 30, 2006 (the “ Interim Balance Sheets
”) and the related unaudited interim consolidated statements
of income and cash flows for the nine-month periods then ended
(collectively, with the Interim Balance Sheets, the “
Interim Financial Statements ” and, collectively with
the Annual Financial Statements, the “ Financial
Statements ”). The Financial Statements (i) have
been prepared from and are consistent with the books and records of
the Division Subsidiaries, (ii) have been prepared in
accordance with GAAP, consistently applied, throughout the periods
presented (except for adjustments or other matters disclosed
therein and for the absence of footnotes, and, in the case of the
Interim Financial Statements, subject to normal year-end
adjustments) and (iii) present fairly in all material respects
the financial condition and results of operations and cash flows of
the Division as of such dates and for the periods
presented.
(b) Except for liabilities or
obligations (i) disclosed in the Financial Statements or the
notes thereto, (ii) incurred in the ordinary course of
business and consistent with past practice since the date of the
most recent Interim Balance Sheet or (iii) disclosed in the
Disclosure Letter (none of which is a liability resulting from
breach of contract, breach of warranty, tort, infringement, claim
or lawsuit and which would be material to the business of the
Division taken as a whole, either individually or in the
aggregate), neither Holdings nor any of the Division Subsidiaries
has incurred any liabilities (whether accrued, contingent,
absolute,
15
determined, determinable or
otherwise) of a nature required to be set forth or reflected in a
consolidated balance sheet of the Division prepared in accordance
with GAAP.
(c) When delivered pursuant
to Section 1.4(f) hereof, the Audited Financial Statements
(i) will have been prepared from the books and records of the
Division Subsidiaries, (ii) will have been prepared in
accordance with GAAP, consistently applied, throughout the periods
presented (except for adjustments or other matters disclosed
therein) and (iii) will present fairly in all material
respects the financial condition and results of operations of the
Division as of such dates and for the periods presented.
3.8 Absence of Certain
Changes or Events . Except as otherwise contemplated by this
Agreement, during the period from September 30, 2006 to the
date of the Initial Agreement, (a) WIN has operated the
Division in the ordinary course of business, consistent with past
practice, (b) there have not been any changes in the business,
assets, liabilities, results of operations or financial condition
of the Division Subsidiaries which in the aggregate have had or are
reasonably likely to have a Company Material Adverse Effect, and
(c) neither Holdings nor the Division Subsidiaries have
engaged in or taken any action which, if taken between the date
hereof and the Closing Date, would be prohibited by Sections
5.1(a), (e), (f), (g), (h), (j), (l), (o), (q), (r) or
(t) hereof.
3.9 Title to Personal
Property . The Division Subsidiaries have, in all material
respects, good and valid title to, or a valid and enforceable right
to use, all material personal property (whether tangible or
intangible, but excluding Intellectual Property Rights) which is
necessary for the operation of the Division substantially as
operated on the date hereof (the “ Personal Property
”) (except such as have been sold or otherwise disposed of
after the date hereof in the ordinary course of business or in
accordance with Section 5.1 hereof), in each case, free and
clear of all Liens, other than Permitted Liens.
3.10 Title to Real
Property . Section 3.10 of the Disclosure Letter sets
forth: (i) a true and complete list of all Owned Real Property
and (ii) a true and complete list of all Real Property Leases
(including all amendments, extensions, renewals, guaranties and
other agreements with respect thereto) including the expiration of
the lease term, the names of the parties thereto and the address of
each parcel of Leased Real Property.
(b) With respect to each
Owned Real Property: (A) the Division Subsidiaries have
indefeasible fee simple title to such Owned Real Property, free and
clear of all Liens and encumbrances, except Permitted Liens,
(B) except as set forth in Section 3.10 of the Disclosure
Letter, the Division Subsidiaries have not leased or otherwise
granted to any Person the right to use or occupy such Owned Real
Property or any portion thereof; and (C) other than the right
of the WCAS Subs pursuant to this Agreement, there are no
outstanding options, rights of first offer or rights of first
refusal to purchase such Owned Real Property or any portion thereof
or interest therein.
(c) With respect to the
Leased Real Property, the Division Subsidiaries have delivered to
the WCAS Subs a true and complete copy of each such Real Property
Lease. Except as set forth in Section 3.10 of the Disclosure
Letter, with respect to each of the Real Property Leases:
(i) such lease is in full force and effect, (ii) the
transactions contemplated by
16
this Agreement do not require
the consent of any other party to such lease, will not result in a
material breach of or material default under such lease, or
otherwise cause such lease to cease to be legal, valid, binding,
enforceable and in full force and effect on identical terms
following the Closing, (iii) to the Knowledge of WIN, the
Division Subsidiaries’ possession and quiet enjoyment of the
Leased Real Property under such lease has not been disturbed and
there are no material disputes with respect to such lease,
(iv) neither the Division Subsidiaries nor any other party to
the Real Property Leases is in material breach or default under
such lease, and no event has occurred or circumstance exists which,
with the delivery of notice, the passage of time or both, would
constitute such a breach or default, or permit the termination,
modification or acceleration of rent under such lease, (v) to
the Knowledge of WIN, no security deposit or portion thereof
deposited with respect to such lease has been applied in respect of
a breach or default under such lease which has not been redeposited
in full, (vi) the Division Subsidiaries do not owe, nor will
the Division Subsidiaries owe in the future, any material brokerage
commissions or finder’s fees with respect to such lease;
(vii) the other party to such lease is not an Affiliate of the
Division Subsidiaries, (viii) the Division Subsidiaries are
not, in any material respect, currently subleasing, licensing or
otherwise granting any Person the right to use or occupy such
Leased Real Property or any portion thereof, (ix) the Division
Subsidiaries are not, in any material respect, currently assigning
or granting any other security interest in such lease or any
interest therein; and (x) there are no Liens or encumbrances
on the estate or interest created by such lease.
3.11 Intellectual
Property.
(a) The Division Subsidiaries
own or possess, or will upon execution of the Ancillary Agreements
prior to or at Closing own or possess, all right, title and
interest in and to, free and clear of all Liens, or valid and
enforceable and adequate licenses or other legal rights to use, all
Intellectual Property Rights (other than those arising under any
contracts, agreements or arrangements as are listed in
Section 6.2 of the Disclosure Letter) as are necessary to
permit the operation of the Division substantially as operated on
the date hereof (collectively, the “ Division Intellectual
Property Rights ”).
(b) Section 3.11(b) of
the Disclosure Letter sets forth a list of all U.S., foreign and
multi-national: (i) patents and patent applications;
(ii) registrations and applications for registrations of Marks
(including Internet domain name registrations) and material
unregistered Marks; (iii) copyright registrations and
copyright applications filed or issued during the period from
July 1, 2005 through June 30, 2006; and
(iv) material software products, in each case, owned by any of
the Division Subsidiaries. The material Intellectual Property
Rights required to be set forth in Section 3.11(b) of the
Disclosure Letter are, to the Knowledge of WIN, valid, subsisting
and enforceable.
(c) Section 3.11(c) of
the Disclosure Letter lists all material agreements to which any of
the Division Subsidiaries is a party or otherwise bound and
pursuant to which any of the Division Subsidiaries have granted or
obtained any Intellectual Property Rights (excluding any such
agreements for software that is commercially available to consumers
for a combined license and maintenance fee of less than Fifty
Thousand Dollars ($50,000) per year or subject to
“shrink-wrap” or “click-through” license
agreements or listed in Section 6.2 of the Disclosure Letter)
the “ Material IP Agreements ”).
17
(d) (i) No claims, or, to the
Knowledge of WIN, threat of claims, have been asserted by any
Person related to the use in the operation of the Division of any
Intellectual Property Rights or challenging or questioning the
validity, effectiveness, ownership, or enforceability of any
material Division Intellectual Property Rights, (ii) to the
Knowledge of WIN, the operation of the Division, as operated as of
the date hereof, does not infringe on, misappropriate or otherwise
conflict with the Intellectual Property Rights of any Person in any
material respect, and neither WIN nor the Division Subsidiaries
have received any notice relating to any of the foregoing,
(iii) to the Knowledge of WIN, no Person has infringed,
misappropriated or otherwise conflicted with the Division
Intellectual Property Rights in any material respect, and
(iv) all filings, registrations and issuances pertaining to
the material Intellectual Property Rights owned by the Division
Subsidiaries, including any and all patents, registered Marks and
copyright registrations, are in full force and effect and one of
the Division Subsidiaries has good and marketable title thereto.
None of the Division Intellectual Property Rights are subject to
any outstanding consent, settlement, order, decree, injunction,
judgment or ruling restricting the use thereof.
(e) All of the Division
Intellectual Property Rights shall be owned or available for use by
the Division Subsidiaries immediately after the Closing on terms
and conditions substantially similar to those under which the
Division Subsidiaries owned or used the Division Intellectual
Property Rights immediately prior to the Closing.
3.12 Litigation .
There are no actions, suits, proceedings, investigations and
inquiries (“ Litigation ”) pending, asserted or,
to the Knowledge of WIN, threatened in writing to be asserted by or
before any Governmental Entity or arbitration panel, by or on
behalf of any third party, against Holdings or any of the Division
Subsidiaries or against WIN relating to the Division. No Litigation
contemplated in the preceding sentence, if adversely determined,
individually or in the aggregate, would reasonably be expected to:
(a) result in a Company Material Adverse Effect or
(b) prevent or materially impair or delay the ability of
Holdings or any of the Division Subsidiaries to consummate the
transactions contemplated by this Agreement and the Ancillary
Agreements. There are no material outstanding judgments, decrees or
orders of any court, arbitration panel or Governmental Entity,
affecting Holdings, any of the Division Subsidiaries or against WIN
relating to the Division or the assets of the Division.
3.13 Employee Benefit
Plans .
(a) Section 3.13(a) of
the Disclosure Letter sets forth a true and complete list of: each
material deferred compensation and each bonus or other incentive
compensation, stock purchase, stock option and other equity
compensation plan, program, agreement or arrangement; each material
severance or termination pay, medical, surgical, hospitalization,
life insurance and other “welfare” plan, fund or
program (within the meaning of section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended (“
ERISA ”)); each material profit-sharing, stock bonus
or other “pension” plan, fund or program (within the
meaning of section 3(2) of ERISA); each employment, termination or
severance agreement; and each other material employee benefit plan,
fund, program, agreement or arrangement, in each case, that is
sponsored, maintained or contributed to or required to be
contributed to by WIN or by any trade or business, whether or not
incorporated (an “ ERISA Affiliate ”), that
together with WIN, Holdings or any Division Subsidiary at any
relevant time would be deemed a “single
18
employer” within the
meaning of section 4001(b) of ERISA or section 414 of the Code, or
to which WIN, Holdings or any Division Subsidiary or an ERISA
Affiliate is party, whether written or oral, for the benefit of any
current or former employee, officer, director, or contractor of
Holdings or the Division Subsidiaries who will be a Continuing
Division Employee under this Agreement (the “ WIN
Plans ”). There are no WIN Plans in which only Holdings
and/or any of the Division Subsidiaries participates or which cover
only current or former employees, officers, directors or
contractors of Holdings and/or any Division Subsidiary or with
respect to which Holdings and/or any Division Subsidiary will have
any liability or obligation at or after the Effective
Time.
(b) With respect to each WIN
Plan in which Continuing Division Employees participate, WIN has
heretofore delivered or made available to the WCAS Subs true and
complete copies of the WIN Plan and any amendments thereto, or the
applicable Summary Plan Description.
(c) No liability or
obligation under (i) Title IV or section 302 of ERISA or
section 412 of the Code, (ii) any “multiple employer
welfare arrangement” as defined in section 3(40) of ERISA or
(iii) any “multiple employer plan” within the
meaning of section 210 of ERISA or section 413(c) of the Code, in
any case, has been or could be incurred by WIN or any ERISA
Affiliate which could reasonably be expected to result in a
material liability or obligation to the WCAS Subs, Holdings or any
Division Subsidiary.
(d) There has been no
material failure of a WIN Plan that is a group health plan (as
defined in section 5000(b)(1) of the Code) to meet the requirements
of section 4980B(f) of the Code with respect to a qualified
beneficiary (as defined in section 4980B(g) of the Code) which
could reasonably be expected to result in a material liability to
the WCAS Subs or Holdings or any Division Subsidiary. None of
Holdings or any Division Subsidiary has any current or potential
liability or obligation to provide post-employment or
post-termination welfare or welfare-type benefits to any current or
former employee of Holdings and/or any Division Subsidiary, except
as required by COBRA.
(e) Neither WIN nor any ERISA
Affiliate of WIN has incurred or could incur a withdrawal liability
with respect to any “multiemployer pension plan,” as
defined in section 3(37) of ERISA, which could reasonably be
expected to result in a material liability or obligation to the
WCAS Subs, Holdings or any Division Subsidiary.
(f) The consummation of the
transactions contemplated by this Agreement will not, either alone
or in combination with another event, (i) entitle any current
or former employee, officer, director or contractor of Holdings or
the Division Subsidiaries to severance pay, unemployment
compensation or any other payment, or (ii) accelerate the time
of payment or vesting, or increase the amount of compensation due
any such employee or officer, director or contractor.
(g) There are no pending or,
to the Knowledge of WIN, threatened claims, actions, proceedings,
hearings, audits, examinations, investigations, or suits by or on
behalf of any WIN Plan in which Continuing Division Employees
participate, by any employee
19
or beneficiary covered under
any such WIN Plan, or otherwise involving any such WIN Plan (other
than routine claims for benefits).
3.14 Taxes
.
(a) All material federal,
state, local, and foreign Tax Returns relating to the Division
required to be filed by or on behalf of Holdings or the Division
Subsidiaries, and each consolidated, combined, unitary, affiliated
or aggregate group of which Holdings or any of the Division
Subsidiaries are a member (an “ Affiliated Group
”) has been timely filed (taking into account applicable
extensions), and each such Tax Return was complete and correct in
all material respects.
(b) All material Taxes
relating to the Division due and owing by Holdings or the Division
Subsidiaries, or any Affiliated Group have been paid, and all
material Taxes relating to Holdings and the Division Subsidiaries
for any taxable period (or portion thereof) beginning on or prior
to the Closing Date (which are not yet due and payable) have been
properly reserved for in the books and records of
Holdings.
(c) No audits or other
administrative proceedings or proceedings before any taxing
authority are presently pending with regard to any Taxes or Tax
Return of Holdings or any Division Subsidiary, as to which any
taxing authority has asserted (in writing) any claim which, if
adversely determined, would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect, and, to the Knowledge of WIN, no taxing authority is now
asserting (in writing) any deficiency or claim for Taxes or any
adjustment to Taxes with respect to which Holdings or any Division
Subsidiary may be liable with respect to income or other material
Taxes which has not been fully paid or finally settled.
(d) Holdings and each
Division Subsidiary have duly and timely withheld all material
Taxes required to be withheld and such withheld Taxes have either
been duly and timely paid to the proper taxing authority or
properly set aside in accounts for such purpose and will be duly
and timely paid to the proper taxing authority.
(e) Neither Holdings nor any
of the Division Subsidiaries (i) are party to or bound by or
has any obligation under any Tax separation, sharing or similar
agreement or arrangement, (ii) are or has been a member of any
consolidated, combined or unitary group for purposes of filing Tax
Returns or paying Taxes (other than a group of which WIN or ALLTEL
Corporation, a Delaware corporation, is the common parent
corporation) or (iii) has entered into a closing agreement
pursuant to Section 7121 of the Code, or any predecessor
provision or any similar provision of State or local
law.
(f) There are no Liens
relating to Taxes upon the assets of Holdings or the Division
Subsidiaries other than Liens relating to Taxes not yet due and
payable.
(g) There are no outstanding
agreements or waivers or other documents having the effect of
waiving or extending the statutory period of limitation applicable
to any Tax Return of the Affiliated Group or Holdings or any of the
Division Subsidiaries, and no power of attorney has been filed with
any taxing authority.
20
(h) Neither Holdings nor any
Division Subsidiary are party to any listed transactions, the
principal purpose of which was tax avoidance, within the meaning of
Sections 6011, 6111 and 6112 of the Code.
(i) Neither Holdings nor any
Division Subsidiary 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 have
not had, and could not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(j) The federal income Tax
Returns of the Affiliated Group, Holdings and the Divisions
Subsidiaries have been examined, and such examinations have been
resolved, or the statute of limitations has expired, for all
taxable years through 2000.
(k) For purposes of this
Agreement (i) “ Tax ” (and, with
correlative meaning, “ Taxable ”) shall mean
(A) any and all U.S. federal, state, local and foreign taxes,
including income, alternative or add-on minimum, gross receipts,
profits, lease, service, service use, wage, employment, workers
compensation, business occupation, environmental, estimated,
excise, sales, use, transfer, license, payroll, franchise,
severance, stamp, occupation, windfall profits, withholding, social
security, unemployment, disability, ad valorem, capital stock, paid
in capital, recording, registration, property, real property gains,
value added, business license, custom duties and other taxes,
charges, fees, levies, imposts, duties or assessments of any kind
whatsoever, imposed or required to be withheld by any Taxing
Authority, including any interest, additions to Tax or penalties
applicable or related thereto, (B) any liability for the Taxes
of any Person under Treasury Regulation Section 1.1502-6 (or
similar provision of state or local law), and (C) any
liability for the payment of any amount of a type described in
clause (A) or clause (B) as a result of any obligation to
indemnify or otherwise assume or succeed to the liability of any
other Person, and (ii) “ Tax Return ” means
any return, report or similar statement (including the attached
schedules) required to be filed with respect to any Tax, including
any information return, claim for refund, amended return or
declaration of estimated Tax.
3.15 Material Contracts
and Commitments .
(a) Section 3.15 of the
Disclosure Letter sets forth a complete and correct list of the
following oral and written contracts or arrangements pursuant to
which Holdings or any of the Division Subsidiaries is a party to or
bound by or which relate to the operation of the Division or the
assets of the Division, other than any such contracts or
arrangements that involve obligations of Holdings or the Division
Subsidiaries in any twelve-month period of $100,000 or less or
which are listed in Section 6.2 of the Disclosure Letter
(individually, a “ Material Contract ” and,
collectively, the “ Material Contracts
”):
(i) any contract that
provides for payment to Holdings or any Division Subsidiary for the
performance of services in an amount in excess of $250,000
annually;
(ii) any contract to be
performed relating to capital expenditures in excess of $100,000 in
any calendar year, or in the aggregate requiring
21
capital expenditures in
excess of $500,000 (except for any such contract referenced in
clause (xii) below);
(iii) any contract not
entered into the ordinary course of business, requiring payments by
or to Holdings or any Division Subsidiary in excess of
$500,000;
(iv) any contract which
contains restrictions with respect to payment of dividends or any
other distribution in respect of the capital stock or other equity
interest of Holdings or any Division Subsidiary;
(v) any guarantee in respect
of any indebtedness or obligation of any Person in an amount in
excess of $500,000 (other than with respect to any indebtedness or
obligation of Holdings or any Division Subsidiary);
(vi) any contract limiting,
in any material respect, the ability of Holdings or any Division
Subsidiary to operate the Division, engage in any line of business,
operate in any geographical area or to compete with any Person or
to use any assets of the Division (including the Intellectual
Property Rights);
(vii) any contract under
which Holdings or any Division Subsidiary has borrowed or loaned
money in excess of $500,000 (excluding Intercompany Indebtedness),
or any mortgage, note, bond, indenture or other evidence of
Indebtedness or guaranteed any other Indebtedness under which it
has imposed a Lien on any of its assets, tangible or intangible or
any guarantee of Indebtedness to non-affiliated third
parties;
(viii) any material joint
venture, jointly owned partnership or other similar joint ownership
agreements;
(ix) contracts or consent
decrees of Governmental Entities to which Holdings or any of the
Division Subsidiaries are bound;
(x) any employment,
collective bargaining, severance or change of control contract of a
Continuing Division Employee.
(xi) any agreement (or group
of related agreements) for the lease of real or personal property
to or from any Person providing for lease payments in excess of
$100,000 per annum;
(xii) any agreement (or group
of related agreements) for the purchase or sale of materials,
commodities, supplies, products, or other personal property, or for
the furnishing or receipt of services, the performance of which
will extend over a period of more than one (1) year and
involve consideration in excess of $500,000;
22
(xiii) any material agreement
concerning obligations of confidentiality other than those in the
ordinary course of business or entered into prior to the date of
this Agreement with potential purchasers of the Division
Subsidiaries;
(xiv) any outstanding powers
of attorney granting broad power on behalf of Holdings or any of
the Division Subsidiaries;
(xv) any agreement for the
employment of any employee on a full-time, part-time, consulting,
or other basis providing annual compensation in excess of $150,000
(other than non-executive employees in the sales group);
(xvi) any agreement under
which it has advanced or loaned any amount to any employee in
excess of $10,000; and
(xvii) any settlement,
co-existence conciliation or similar agreement, the performance of
which will involve payment or other obligations after the Closing
Date.
(b) (i) Each of the Material
Contracts is, in all material respects, in full force and effect,
except that (a) enforcement of any Material Contract may be
subject to any bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other Laws, now or hereafter in effect,
relating to or limiting creditors’ rights generally and
(b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought; (ii) there is no pending
material default under or material breach of any Material Contract
by Holdings, any Division Subsidiary of WIN or any of its
Affiliates party thereto, and no event has occurred that, with the
lapse of time or the giving of notice or both, would constitute a
material default thereunder by Holdings, any Division Subsidiary of
WIN or any of its Affiliates party thereto, and (iii) no party
to any such Material Contract has given written notice to Holdings,
any Division Subsidiary or any of its Affiliates of, or made a
written claim against Holdings, any Division Subsidiary of WIN or
any of its Affiliates with respect to, any material breach or
default thereunder.
(c) To the Knowledge of WIN,
no other contracting party to any Material Contract is now in
material breach thereof or has breached the same in any material
respect within the twelve-month period prior to the date
hereof.
(d) None of Holdings, the
Division Subsidiaries, WIN nor any of its Affiliates have received
written notice that any party to any Material Contract intends to
cancel or terminate any such Material Contract or to exercise or
not to exercise any option or extension right thereunder whether as
a result of this transaction or otherwise.
3.16 Compliance with
Laws . Holdings and each of the Division Subsidiaries are, and,
to the Knowledge of WIN, have been since December 31, 2004, in
compliance in all material respects with all applicable laws,
statutes, ordinances, rules, regulations and orders (collectively,
“ Laws ”) of all Governmental Entities with
respect to the Division; provided , however , that
the provisions of Section 3.16 shall not apply to:
(a) Laws regarding intellectual property, which are addressed
in Section 3.11 hereof; ERISA and other Laws applicable to
the
23
WIN Plans, which are addressed in
Section 3.13 hereof; (c) Laws regarding the payment of
Taxes, which are addressed in Section 3.14 hereof;
(d) Laws regarding employment and employment practices, which
are addressed in Section 3.17 hereof; and
(e) Environmental Laws, which are addressed in
Section 3.18 hereof. The Division Subsidiaries possess all
material permits, certificates, licenses, approvals, governmental
franchises and other authorizations required under applicable Laws
(other than those referred to in clauses (a)-(e) above) in
connection with the operation of the Division as operated on the
date hereof and the ownership of their respective assets and
properties and all such permits, certificates, licenses, approvals,
governmental franchises and other authorizations are validly held
and in full force and effect. The Division Subsidiaries are now and
since December 31, 2004 have been in all material respects in
compliance with the terms and conditions thereof.
3.17 Labor Matters .
With respect to the Division, (a) each of the Division
Subsidiaries is and, to the Knowledge of WIN, has been since
December 31, 2004, in compliance with all applicable Laws
regarding employment and employment practices; (b) there are
no unfair labor practice charges or complaints against the Division
Subsidiaries brought before the National Labor Relations Board nor
is there any material grievance nor any material arbitration
proceeding arising out of or under collective bargaining agreements
with respect to the business of the Division Subsidiaries, nor, to
the Knowledge of WIN, is any such charge, complaint, grievance or
proceeding threatened; (c) there is no, and since
December 31, 2004 there has not been any, labor strike or work
stoppage pending or, to the Knowledge of WIN, threatened against
the Division Subsidiaries; and (d) there is no charge or
complaint pending or, to the Knowledge of WIN, threatened against
the Division Subsidiaries before the Equal Employment Opportunity
Commission or any similar state, local or foreign agency
responsible for the prevention of unlawful employment practices,
except, in each of (a) through (d) herein, as would not,
individually or in the aggregate, reasonably be expected to result
in a Company Material Adverse Effect. To the Knowledge of WIN and
with respect to the Division, no Division Subsidiary has received
written notice of the intent of any federal, state, local or
foreign Governmental Entity responsible for the enforcement of
employment Laws to conduct an investigation of or relating to the
Division Subsidiaries, and no such investigation is in progress,
except as would not, individually or in the aggregate, reasonably
be expected to result in a Company Material Adverse
Effect.
3.18 Environmental
.
(a) Since December 31,
2004, Holdings and the Division Subsidiaries have at all times
been, and are, in compliance, in all material respects, with all
applicable Environmental Laws, including, but not limited to,
possessing and complying, in all material respects, with all
permits and other governmental authorizations required for their
operations under applicable Environmental Laws.
(b) There is no pending or
threatened material claim, complaint, investigation, lawsuit, or
administrative proceeding against Holdings or the Division
Subsidiaries under or pursuant to any Environmental Law.
(c) None of Holdings or the
Division Subsidiaries has received written notice from any Person,
including but not limited to any Governmental Entity, alleging
that
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Holdings or said Division
Subsidiary has been or is in material violation or potentially in
material violation of any applicable Environmental Law or otherwise
may be materially liable under any applicable Environmental Law,
other than violations or liabilities or alleged violations or
liabilities that have been resolved.
(d) None of Holdings or the
Division Subsidiaries is a party or subject to any material
administrative or judicial order or decree pursuant to the
Environmental Laws.
(e) With respect to Real
Property that currently is or has been owned, leased or operated by
Holdings or any Division Subsidiary or, to the Knowledge of WIN,
any related offsite disposal location, there have been no Releases
of Hazardous Substances on or underneath any of such Real Property
that individually or in the aggregate would reasonably be expected
to result in a Company Material Adverse Effect.
(f) The representations and
warranties set forth in this Section 3.18 are the sole and
exclusive represent
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