Exhibit 10.1

 
EXCHANGE AGREEMENT
 

EXCHANGE AGREEMENT (the “Agreement”), dated as of July 8, 2006, among ALLTEL
Corporation, a Delaware corporation (“ALLTEL”), J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith Inc. (collectively, the “Investment
Banks”), and, solely with respect to Sections 2, 5, 6, 7, 8, 9 and 10 hereof,
Alltel Holding Corp., a Delaware corporation (“Spinco”).
 
WHEREAS, pursuant to a Distribution Agreement dated as of December 8, 2005
between ALLTEL and Spinco (the “Distribution Agreement”), Spinco has agreed to
issue to ALLTEL, in connection with ALLTEL’s contribution of assets and
liabilities to Spinco, $1,746,000,000 aggregate principal amount of 8⅝% senior
notes due 2016 (“Spinco Securities”);
 
WHEREAS, ALLTEL desires to exchange such Spinco Securities for all or a portion
of the certain debt obligations of ALLTEL described on Schedule I ("ALLTEL Debt
Obligations") held by the Investment Banks; and the Investment Banks desire to
exchange ALLTEL Debt Obligations for such Spinco Securities; and
 
WHEREAS, on June 28, 2006, the Investment Banks and Spinco entered into a
Purchase Agreement (the “Purchase Agreement”) with J.P. Morgan Securities Inc.
and Merrill Lynch, Pierce, Fenner & Smith Inc., as representatives of the
initial purchasers named therein (the “Initial Purchasers”), in connection with
the sale pursuant to Rule 144A and Regulation S under the Securities Act of
1933, as amended, of the Spinco Securities and certain other debt securities of
Spinco, and in connection therewith Spinco will enter into a Registration Rights
Agreement with the Initial Purchasers relating to the grant by Spinco of
registration rights with respect to the Spinco Securities.
 
NOW THEREFORE, in consideration of the representations, warranties and
agreements contained in this Agreement, the parties agree as follows:
 
1.  The Exchange. (a) Subject to the terms and conditions and in reliance upon
the representations and warranties in this Agreement, at the Closing (as defined
below):
 
(i)  ALLTEL will transfer and deliver to the Investment Banks, and the
Investment Banks will accept, the Spinco Securities in equal amounts; and
 
(ii)  the Investment Banks will transfer and deliver to ALLTEL, and ALLTEL will
accept from the Investment Banks, ALLTEL Debt Obligations
with a fair market value as of the Closing, as mutually agreed to by ALLTEL and
the Investment
 
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Banks (taking into account the factors that would be relevant in determining
fair market value, including but not limited to (A) interest rates; (B) the
credit risk of ALLTEL; and (C) the aggregate principal amount of each series of
ALLTEL Debt Obligations being so exchanged relative to the total
amount of each applicable series of such ALLTEL Debt Obligations outstanding, in
each case as of Closing), equal to $1,673,365,133.15 (the
“Exchange ALLTEL Debt Obligations”).
 
    (b)  The exchange of the Spinco Securities for the Exchange ALLTEL Debt
Obligations (the “Closing”) shall occur at the office of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York (or at such other location or
locations as may be agreed upon by the Investment Banks and ALLTEL), at
the time and on the date of the closing of the transactions contemplated by the
Agreement and Plan of Merger (the “Merger Agreement”) dated as of December
8, 2005 among Alltel, Spinco and Valor Communications Group, Inc. subject to
satisfaction (or waiver) of the conditions set forth in Section 4 of this
Agreement;
provided that the exchange shall not occur prior to July 17, 2006 (the “Closing
Date”). At the Closing, the Investment Banks shall deliver to ALLTEL (or a
custodian on ALLTEL’s behalf, as directed) their respective holdings of the
Exchange ALLTEL Debt Obligations, and ALLTEL shall deliver to the Investment
Banks the Spinco Securities.
 
    (c)  As used in this Agreement, the term “Business Day” shall mean those
days on which both the New York Stock Exchange and banking
institutions located in New York City are open for trading or banking, as the
case may be, in the ordinary course of business.
 
2.  Assignment of Rights by ALLTEL. Effective as of the Closing, ALLTEL hereby
assigns to the Investment Banks all of its rights arising out of or in respect
of the Spinco Securities, and Spinco hereby consents to such assignment.
 
3.  Representations and Warranties. (a) ALLTEL hereby represents and warrants to
the Investment Banks that:
 
       (i)  ALLTEL is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. ALLTEL has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. This Agreement has been duly
executed and delivered by ALLTEL and constitutes a legal, valid and binding
obligation of ALLTEL, enforceable against ALLTEL in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the
 
 
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enforcement of creditors’ rights generally or by equitable principles relating
to enforceability.
 
       (ii)  No consent, approval, license, permit, order or authorization of,
or registration, declaration or filing with, any Federal, state, local or
foreign
    government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic
            or foreign (a “Governmental Entity”) or nongovernmental third party
is required to be obtained or made by or with respect to ALLTEL or any of its
    subsidiaries, including Spinco, in connection with the execution, delivery
and performance of this Agreement except as have been previously obtained
or made.
 
   (iii)  Neither the exchange of the Spinco Securities nor the consummation of
any other of the transactions herein contemplated nor the fulfillment
    of the terms hereof will result in a breach of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust or
other agreement or instrument to which ALLTEL or any of its subsidiaries,
including Spinco, is a party or by which it is bound, or ALLTEL’s
Amended and Restated Certificate of Incorporation or Bylaws, or any order, rule
or regulation applicable to ALLTEL or any of its subsidiaries,
including Spinco, of any Governmental Entity having jurisdiction over ALLTEL or
any of its subsidiaries, including Spinco, or their respective
properties.
 
   (iv)  Prior to the Closing, ALLTEL will have good and valid title to the
Spinco Securities, free and clear of any liens, claims, encumbrances,
security interests, options, charges or restrictions of any kind (collectively,
“Liens”). Upon delivery of the Spinco Securities by ALLTEL to the
Investment Banks at the Closing in exchange for the Exchange ALLTEL Debt
Obligations, the Investment Banks will acquire good and valid title to
such Spinco Securities, free and clear of any Liens.
 
   (v)  When the Spinco Securities are issued by Spinco to ALLTEL and when they
are transferred to the Investment Banks at the Closing in
exchange for the Exchange ALLTEL Debt Obligations, the Spinco Securities will
(A) have been duly and validly authorized and issued, (B) constitute
valid and legally binding obligations of Spinco enforceable against Spinco in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally or by equitable principles relating to
enforceability, and (C) be entitled to the benefits of the indenture governing
the Spinco Securities.
 
   (vi)  ALLTEL has made its own independent inquiry as to the legal, tax and
accounting aspects of the transactions contemplated by this
Agreement and any related transactions, and ALLTEL has not relied on
 
 
 
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the Investment Banks, the Investment Banks’ legal counsel or other advisors for
legal, tax or accounting advice in connection with the transactions
contemplated by this Agreement or any related transactions.
 
(b)  Each of the Investment Banks hereby severally as to itself and not jointly
represents and warrants to ALLTEL that:
 
(i)  Such Investment Bank is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation.
 Such Investment Bank has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. This
Agreement has been duly executed and delivered by such Investment Bank and
constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally or by equitable principles relating to
enforceability.
 
 (ii)  No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or
nongovernmental third party is required to be obtained or made by or with
respect to such Investment Bank in connection with the execution,
delivery and performance of this Agreement except as have been previously
obtained or made.
 
  (iii)  Neither the exchange of the Exchange ALLTEL Debt Obligations nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will result in a breach of
any of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to which
such Investment Bank is a party or by which it is bound, or such
Investment Banks’ charter or other organizational documents, or any order, rule
or regulation applicable to it of any Governmental Entity having
jurisdiction over it or its properties.
 
   (iv)  Such Investment Bank has good and valid title to the Exchange ALLTEL
Debt Obligations to be exchanged by it pursuant to this
Agreement, free and clear of any Liens. Upon delivery of such Exchange ALLTEL
Debt Obligations by such Investment Bank to ALLTEL at the
Closing in exchange for the Spinco Securities, ALLTEL will acquire good and
valid title to such Exchange ALLTEL Debt Obligations, free and clear
of any Liens.
 
    (v)  Such Investment Bank has made its own independent inquiry as to the
legal, tax and accounting aspects of the transactions contemplated
by this Agreement and any related transactions, and it has not relied on ALLTEL,
ALLTEL’s legal counsel or ALLTEL’s other advisors for legal,
 
 
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tax or accounting advice in connection with the transactions contemplated by
this Agreement or any related transactions.
 
4.  Conditions.
 
 (a)  The obligations of the Investment Banks to exchange the Exchange ALLTEL
Debt Obligations for the Spinco Securities at the Closing
 shall be subject to the satisfaction (or waiver by the Investment Banks) of the
following conditions:
 
(i)  ALLTEL shall have furnished to the Investment Banks an opinion of Skadden,
Arps, Slate, Meagher & Flom LLP dated the Closing
  Date, to the effect as agreed upon between ALLTEL and the Investment Banks.
 
(ii)  No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order
  enacted, entered, promulgated, enforced or issued by any Governmental Entity
or other legal restraint or prohibition shall be in effect preventing
  the consummation of the transactions contemplated hereunder.
 
(iii)  The representations and warranties of ALLTEL in this Agreement shall be
true and correct in all material respects on and as of the
Closing Date, with the same effect as if made on the Closing Date, and ALLTEL
shall have complied with all the agreements to be performed or
satisfied at or prior to the Closing Date, and ALLTEL shall have furnished to
the Investment Banks a certificate of ALLTEL, in form reasonably
satisfactory to the Investment Banks signed by a Vice President or Treasurer of
ALLTEL, dated the Closing Date, to the foregoing effects.
 
(iv)  The private letter ruling ALLTEL received from the Internal Revenue
Service on April 7, 2006 (as the same may be supplemented
from time to time prior to the Closing Date) shall continue to be valid as of
the Closing Date.
 
(v)  The Purchase Agreement shall remain in full force and effect, and all of
the conditions to the obligations of the Initial Purchasers
to purchase and pay for the Spinco Securities as set forth in the Purchase
Agreement shall have been satisfied.
 
In case any of such conditions shall not have been fulfilled by July 31, 2006,
or if the Merger Agreement, the Distribution Agreement or the Purchase Agreement
shall
have been terminated in accordance with their terms, this Agreement may be
terminated by the Investment Banks by delivering written notice of termination
to ALLTEL. Any
such termination shall be without liability
 
 
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of any party to any other party except to the extent provided in the Purchase
Agreement.
 
(b)  The obligations of ALLTEL to exchange the Spinco Securities for the
Exchange ALLTEL Debt Obligations at the Closing shall be subject
to the satisfaction (or waiver by ALLTEL) of the following conditions:
 
(i)  The Investment Banks shall have furnished to ALLTEL an opinion of Davis
Polk & Wardwell, counsel for the Investment Banks,
dated the Closing Date, to the effect as agreed upon between ALLTEL and the
Investment Banks.
 
(ii)  The representations and warranties of the Investment Banks in this
Agreement shall be true and correct in all material respects on
and as of the Closing Date, with the same effect as if made on the Closing Date,
and the Investment Banks shall have complied with all the
agreements to be performed or satisfied at or prior to the Closing Date, and the
Investment Banks shall have furnished to ALLTEL a certificate of
each of the Investment Banks, in form reasonably satisfactory to ALLTEL signed
by an officer of such Investment Bank, dated the Closing Date,
to the foregoing effects.
 
In case any of such conditions shall not have been fulfilled by July 31, 2006,
or if the Merger Agreement, the Distribution Agreement or the Purchase Agreement
shall
have been terminated in accordance with their terms, this Agreement may be
terminated by ALLTEL by delivering written notice of termination to the
Investment Banks. Any
such termination shall be without liability of any party to any other party
except to the extent provided in the Purchase Agreement.
 
5.  Relationship of Parties. All acquisitions of the Exchange ALLTEL Debt
Obligations by the Investment Banks, all exchanges of the Exchange ALLTEL Debt
Obligations for the Spinco Securities by the Investment Banks pursuant to this
Agreement, any resales by the Investment Banks of the Spinco Securities and all
other acts or omissions of the Investment Banks in connection with this
Agreement, are for the Investment Banks’ own account and not for the account of
ALLTEL. No principal-agent relationship is, or is intended to be created between
ALLTEL and the Investment Banks, by any of the provisions of this Agreement.
Each of ALLTEL and Spinco acknowledges and agrees that the Investment Banks are
acting solely in the capacity of an arm’s length contractual counterparty to
ALLTEL and Spinco with respect to the transactions contemplated hereby
(including in connection with determining the terms of the offering under the
Purchase Agreement) and not as a financial advisor or a fiduciary to, or an
agent of, ALLTEL, Spinco or any other person.
 
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6.  Survival of Provisions. The respective agreements, representations,
warranties and other statements of ALLTEL and of the Investment Banks and
agreements of Spinco set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of the Investment Banks, ALLTEL, Spinco or any of their respective officers and
will survive the exchange of the Exchange ALLTEL Debt Obligations for the Spinco
Securities.
 
7.  Notices. All notices or other communications under this Agreement shall be
in writing and shall be deemed to be duly given as of the date delivered, mailed
or transmitted, and shall be effective upon receipt, if delivered personally,
mailed by registered or certified mail (postage prepaid, return receipt
requested) or delivered by a nationally recognized courier service to the
parties at the following address or sent by electronic transmission to the
telecopier numbers specified below:
 
If to the Investment Banks, to:                                          Merrill
Lynch & Co.
4 World Financial
New York, NY 10080
Attention: Liability Management
            Desk
Fax: (212) 738-2227
 
      and
 
                J.P. Morgan Securities Inc.
270 Park Avenue
New York, NY 10017-2070
Attention: Liability Management
              Desk
Fax: (212) 834-6170
 
If to ALLTEL,
to:                                                                  ALLTEL
Corporation
                One Allied Drive
                Little Rock, Arkansas 72202
                Attention: General Counsel
                Fax: (501) 905-0962

 
If to Spinco, to:
                Alltel Holding Corporation

   
                4001 Rodney Parham Road

                Little Rock, AR  72212
               Attention: General Counsel
               Fax: (501) 748-7400

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8.  Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and no other person will have
any right or obligation hereunder.
 
9.  Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
 
10.  Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
 
 

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  IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.
 

 
ALLTEL CORPORATION
By:
 /s/ Scott T. Ford
                              Name: Scott T. Ford
                              Title: President and CEO

J.P. MORGAN SECURITIES INC.
By:
 /s/ Akis Psarris
                               Name: Akis Psarris
                               Title: Managing Director

MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.
By:
 /s/ David B. Parsons
                               Name: David B. Parsons
                               Title: Managing Director

        As to Sections 2, 5, 6, 7, 8, 9 and 10 only:

ALLTEL HOLDING CORP.
By:
 /s/ Jeffery R. Gardner
                                Name: Jeffery R. Gardner
                                Title: President and CEO

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SCHEDULE I
ALLTEL Debt Obligations

Security
Principal Amount
Commercial Paper
$1,000,000,000
   
4.656% Notes due 2007
$686,557,000

 

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