Exhibit 99.23
WARRANT AGREEMENT, dated as of April 12, 2002, between McLeodUSA
Incorporated, a Delaware corporation (the "Company"), and Xxxxx Fargo Bank
Minnesota, N.A , a national banking association, as Warrant Agent (the
"Warrant Agent").
WHEREAS, the Company proposes to issue warrants as hereinafter
described (the "Warrants") to purchase up to an aggregate of 44,318,182
shares (the "Shares") of the Company's Class A Common Stock, par value $.01
per share (the " Common Stock"), pursuant to (i) section 4.6 of the Amended
Plan of Reorganization of McLeodUSA Incorporated, dated February 28, 2002
(as it may be further amended or modified, the "Plan") and (ii) that
certain Amended and Restated Purchase Agreement, dated as of January 30,
2002, by and among the Company and the investors party thereto; and
WHEREAS, the Company wishes the Warrant Agent to act as Warrant
Agent on behalf of the Company, and the Warrant Agent is willing to so act,
in connection with the issuance of the Warrants and other matters provided
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and for good and valuable consideration, the
parties hereto agree as follows:
1. Appointment of Warrant Agent; Issuance of Warrants; Form of Warrants.
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth in this Agreement,
and the Warrant Agent hereby accepts such appointment. The Warrant Agent
shall maintain the Warrant Register described in Section 2 and shall
countersign, issue and deliver the Warrants and carry out the other duties
specified herein under the terms of this Agreement and the written
instructions of the Chairman of the Board, the President, one of the Vice
Presidents, the Secretary or one of the Assistant Secretaries of the
Company.
The Warrants shall be in registered form only and shall be
evidenced by certificates ("Warrant Certificates" or "Certificates")
substantially in the form attached hereto as Exhibit A. The Warrants shall
be executed on behalf of the Company by the manual or facsimile signature
of the Chairman of the Board, the Chief Executive Officer, the Chief
Financial Officer, the President, the Treasurer or a Vice President of the
Company and attested by the manual or facsimile signature of the Secretary
or an Assistant Secretary of the Company.
Each Warrant shall be countersigned by the manual signature of
the Warrant Agent (or any successor to the Warrant Agent then acting as
warrant agent under this Agreement) and shall not be valid for any purpose
unless so countersigned. Warrants shall be dated as of the date of
countersignature thereof by the Warrant Agent upon initial issuance and
upon division, exchange, substitution or transfer.
In case any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer of the Company
before countersignature by the Warrant Agent, such Warrant Certificates
may, nevertheless, be issued and delivered with the same force and effect
as though the person who signed such Warrant Certificates had not ceased to
be such officer of the Company. Any Warrant Certificates may be signed on
behalf of the Company by any person who, at the actual date of execution of
such Warrant Certificates, shall be a proper officer of the Company to sign
such Warrant Certificates, even if such person did not hold such office on
the date of this Agreement.
2. Registration. The Warrants shall be numbered and shall be registered in
a warrant register (the "Warrant Register") as they are issued, which
register shall be kept at one of the Warrant Agent's offices in South St.
Xxxx, Minnesota. The Warrant Register shall show the names and addresses of
the respective holders of the Warrants, the number of Shares purchasable on
the face of each Warrant so held and the date of such Warrant. The Company
and the Warrant Agent shall be entitled to treat the registered holder of
any Warrant on the Warrant Register (the "Holder", which term shall also
refer to the registered holder of any Shares) as the owner in fact thereof
for all purposes and shall not be bound to recognize, or make any inquiries
with respect to, any equitable or other claim to or interest in such
Warrant on the part of any other person, and neither the Company nor the
Warrant Agent shall be affected by notice to the contrary.
3. Exchange of Warrant Certificates. Each Warrant Certificate may be
exchanged for another Certificate or Certificates entitling the Holder
thereof to purchase a like aggregate number of Shares as the Certificate or
Certificates surrendered then entitle such Holder to purchase. No
fractional Warrant Certificates shall be issued. Any Holder desiring to
exchange a Warrant Certificate or Certificates shall make such request in
writing delivered to the Warrant Agent and shall surrender, properly
endorsed, the Certificate or Certificates to be so exchanged at the office
of the Warrant Agent designated for such purpose. Thereupon, the Warrant
Agent shall countersign and deliver to the person entitled thereto a new
Warrant Certificate or Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Warrant Certificates.
4. Transfers of Warrants. The Warrants shall be transferable only on the
Warrant Register upon surrender thereof accompanied by a written instrument
for transfer in the form of the assignment appearing on the form of Warrant
Certificate attached hereto as Exhibit A, duly executed by the Holder or by
his duly authorized attorney or representative. In all cases of transfer by
an attorney, the original power of attorney, duly approved, or an official
copy thereof, duly certified, shall be deposited and remain with the
Warrant Agent. In case of transfer by executors, administrators, guardians
or other legal representatives, duly authenticated evidence of their
authority shall be produced, and may be required to be deposited with the
Warrant Agent in its discretion. Upon any registration of transfer, the
Warrant Agent shall countersign and deliver a new Warrant or Warrants to
the persons entitled thereto. The Holder of such Warrants shall pay any
transfer taxes or other reasonable charges as the Company may prescribe in
connection with such transfer.
5. Term of Warrants; Exercise of Warrants.
(a) Each Warrant entitles the Holder thereof to purchase one
Share, subject to adjustment as set forth herein, at any time until 5:00
P.M., New York City time, on April 16, 2007; provided that if such date
shall not be a Business Day (as defined below), then 5:00 P.M., New York
City Time, on the next following day which is a Business Day (the
"Expiration Date"), at an initial exercise price per Share equal to
$1.3538462, subject to adjustment as set forth herein (the "Exercise
Price"). As used herein, the term "Business Day" shall mean a day which is
not a Saturday or Sunday and which is not, in the State of New York, a
holiday or a day on which banks are authorized to close. Each Warrant not
exercised on or before the Expiration Date shall expire.
(b) The Exercise Price and the number of Shares purchasable
upon the exercise of each Warrant are subject to adjustment upon the
occurrence of certain events, pursuant to the provisions of Sections 11 and
12 of this Agreement. Subject to the provisions of this Agreement, each
Holder of a Warrant Certificate shall have the right to exercise the
Warrants evidenced thereby in whole or in part at any time and from time to
time prior to the Expiration Date upon surrender of the Warrant
Certificate, with the form of election to exercise (the "Exercise Notice")
on the reverse side thereof duly filled in and executed, to the Warrant
Agent at the office of the Warrant Agent designated for such purpose,
together with payment of the Exercise Price, for the number of Shares in
respect of which such Warrants are then exercised.
(c) Payment of the Exercise Price shall be made at the
option of the Holder (i) by cashier's check, official bank check or money
order made payable to the order of the Company or wire transfer of funds to
an account designated by the Company or (ii) by the surrender of a Warrant
Certificate to the Warrant Agent, with a duly executed Exercise Notice
marked to reflect "Cashless Exercise" (a "Cashless Exercise"), and, in
either case, specifying the number of Warrants being exercised. Upon an
exercise of Warrants other than a Cashless Exercise, the holder shall be
entitled to receive the number of shares of Common Stock purchasable upon
exercise of the number of Warrants specified in the Exercise Notice. Upon a
Cashless Exercise, the holder shall be entitled to receive the number of
shares of Common Stock computed using the following formula:
X = Y x (A-B)
-----
A
Where X = the number of shares of Common Stock to be issued to the
Holder;
Y = the number of shares of Common Stock purchasable upon
the exercise for cash of the number of Warrants specified
in the Exercise Notice;
A = the Fair Market Value of one share of the Common
Stock;
B = the Exercise Price (as adjusted to the date of such
calculation).
(d) The date of exercise of any Warrant shall be deemed to
be the date of receipt of the Warrant Certificate by the Warrant Agent with
an Exercise Notice duly filled in and executed and accompanied by proper
payment as herein provided. The method of delivery of any Warrant
Certificates to the Warrant Agent is at the option and risk of the Holder
thereof.
(e) Upon receipt of a Warrant Certificate representing an
exercisable Warrant, with the Exercise Notice duly filled in and executed,
accompanied by payment of the Exercise Price for the Shares to be purchased
as provided in Section 5(c), the Warrant Agent shall thereupon promptly (i)
requisition from any transfer agent of the Shares (or make available, if
the Warrant Agent is the transfer agent) certificate(s) for the number of
Shares to be purchased, and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash, if any, to be paid in lieu
of issuance of fractional Shares in accordance with Section 13, (iii)
promptly after receipt of certificate(s) representing such Shares, cause
the same to be delivered to or upon the order of the Holder of such Warrant
Certificate, registered in such name or names as may be designated by such
Holder, and (iv) when appropriate, after receipt thereof, promptly deliver
such cash to or upon the order of the Holder of such Warrant Certificate.
In the event that the Company is obligated to issue other securities of the
Company upon the exercise of a Warrant, the Company shall make all
arrangements necessary so that such other securities are available for
distribution by the Warrant Agent, if and when appropriate.
(f) In case the Holder of any Warrant Certificate shall
exercise less than all the Warrants evidenced thereby, a new Warrant
Certificate evidencing Warrants equivalent to the Warrants remaining
unexercised shall be issued by the Warrant Agent and delivered to the
Holder of such Warrant Certificate or to his duly authorized assigns.
6. Cancellation and Destruction of Warrant Certificates. All Warrant
Certificates surrendered for the purpose of exercise, transfer or exchange
shall, if surrendered to the Company or any of its agents, be delivered to
the Warrant Agent for cancellation or in canceled form, or, if surrendered
to the Warrant Agent, shall be canceled by it, and no Warrant Certificates
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver to the Warrant
Agent for cancellation and retirement, and the Warrant Agent shall so
cancel and retire, any other Warrant Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Warrant Agent
shall deliver all canceled Warrant Certificates to the Company.
7. Payment of Taxes. The Company shall pay all federal and state transfer
taxes, documentary stamp taxes, and charges, if any attributable to the
initial issuance of Warrants and of Shares initially issued upon the
exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issue or delivery of any Warrant Certificates or
any certificates for Shares in a name other than that of the Holder of such
Warrants or to issue or deliver any certificates for Shares in a name other
than that of the Holder upon the exercise of any Warrants until such tax
shall have been paid (any such tax being payable by the Holder of such
Warrant Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
8. Mutilated or Missing Warrants. Upon receipt by the Company and the
Warrant Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Warrant Certificate and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company, and reimbursement to the Company and the
Warrant Agent of all reasonable expenses incidental thereto, and upon
surrender to the Warrant Agent and cancellation of the Warrant Certificate
if mutilated, the Company shall execute and deliver a new Warrant
Certificate of like tenor to the Warrant Agent for countersignature and
delivery to the Holder in lieu of the Warrant Certificate so lost, stolen,
destroyed or mutilated.
9. Reservation and Availability of Common Stock; Purchase of Warrants.
9.1 Reservation and Availability of Common Stock; Listing of
Common Stock. The Company covenants and agrees that it shall at all times
cause to be reserved and kept available, free from preemptive rights, out
of the authorized and unissued Shares, a number of Shares that shall be
sufficient to permit the exercise in full of the rights of purchase
represented by the Warrants.
The Company covenants and agrees that it shall take all such
action as may be necessary to ensure that all Shares that may be issued
upon exercise of Warrants shall, at the time of delivery of the
certificates for such Shares (subject to the payment of the Exercise
Price), be duly and validly authorized and issued, fully paid and
nonassessable outstanding Shares of the Company.
The Company will use its reasonable efforts so that the
shares of Common Stock issuable upon exercise of the Warrants, as soon as
reasonably practicable following their issuance upon the exercise of this
Warrant, will be listed on the principal securities exchanges, automated
quotation systems or other markets within the United States of America, if
any, on which the shares of Common Stock are then listed (but, in any
event, such listing shall be effected by the Company within the time frame
required by any such exchanges, quotation systems or other markets).
9.2 Purchase of Warrants by the Company. The Company shall
have the right, except as limited by law, to purchase, or otherwise acquire
in negotiated transactions, Warrants at such times, in such manner and for
such consideration as it may deem appropriate.
10. Common Stock Record Date. Each person in whose name any certificate for
Shares is issued upon the exercise of Warrants shall for all purposes be
deemed to have become the holder of the Shares represented thereby on, and
such certificate shall be dated, the date upon which the Warrant
Certificate evidencing such Warrants was duly presented and payment of the
Exercise Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such presentation and payment is a date upon
which the transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such Shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company are open; provided, further, that unless
otherwise provided by law, such transfer books shall not be closed at any
one time for a period of longer than five calendar days. Prior to the
exercise of the rights evidenced thereby, the Holder of a Warrant
Certificate, as such, shall not be entitled to any rights of a stockholder
of the Company with respect to Shares for which the Warrants shall be
exercisable, including, without limitation, the right to vote upon any
matter submitted to the stockholders of the Company, to receive dividends
or other distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceeding of the Company, except
as provided herein.
11. Consolidation, Merger, etc. If any consolidation or merger of the
Company with another corporation or other entity or the sale of all or
substantially all of its assets to another corporation or other entity
(each an "Extraordinary Event") shall be effected, then, as a condition of
such Extraordinary Event, the Company shall cause lawful and adequate
provision to be made whereby the Holders of Warrants shall thereafter have
the right to receive, upon exercise hereof and the payment of the Exercise
Price, in lieu of the shares of Common Stock of the Company immediately
theretofore receivable upon the exercise of the Warrants, such shares of
stock, securities or property (including cash) as may be issued or payable
with respect to or in exchange for a number of shares of Common Stock of
the Company immediately theretofore receivable upon the exercise of the
Warrants had such Extraordinary Event not taken place, and in any such case
appropriate provision shall be made with respect to the rights and
interests of the Holders of the Warrants to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the
number of shares purchasable upon the exercise of the Warrants) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or property thereafter deliverable upon the exercise
hereof. The foregoing provisions shall similarly apply to successive
Extraordinary Events. The Company shall not effect any such consolidation,
merger or sale of all or substantially all of its assets unless, prior to
the consummation thereof, the successor corporation or other entity (if
other than the Company) resulting from such consolidation or merger or the
corporation or other entity purchasing such assets shall assume by written
instrument the obligation to deliver to such Holder such shares of stock,
securities or property as, in accordance with the foregoing provisions,
such Holder may be entitled to purchase or receive.
12. Antidilution Protection.
12.1 If at any time or from time to time after the date of
this Agreement, the Company issues or sells, or is deemed by the express
provisions of this Section 12 to have issued or sold, any Additional Shares
of Common Stock (as defined below), other than as a dividend or other
distribution on any class of stock as provided in Section 12.4 and other
than a subdivision or combination of shares of Common Stock as provided in
Section 12.5, without consideration or for an Effective Price (as defined
below) less than the Fair Market Value (as defined below) per share of
Common Stock immediately prior to the time of such issue or sale, the then
effective Exercise Price shall be reduced, as of the opening of business on
the date of such issue or sale, to the price equal to the quotient obtained
by dividing: (A) the product of (x) such Exercise Price multiplied by (y)
the sum of (i) the total number of shares of Common Stock Outstanding
(including any shares of Common Stock deemed to have been issued pursuant
to this Section 12) immediately prior to such issuance, and (ii) a number
of shares of Common Stock calculated by dividing the consideration received
by the Company from such issuance by the Fair Market Value per Share of the
Common Stock; by (B) the total number of shares of Common Stock Outstanding
(including any shares of Common Stock deemed to have been issued pursuant
to this Section 12) immediately after such issuance of the Additional
Shares of Common Stock. No adjustment of the Exercise Price, however, shall
be made in an amount less than $0.01 per share, and any such lesser
adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which together with any
adjustments so carried forward shall amount to $0.01 per share or more.
Upon any such reduction in the Exercise Price, the total number of Shares
issuable upon exercise of a Warrant shall be equal to the amount obtained
by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Shares issuable upon exercise of such Warrant
immediately prior to such adjustment and dividing the product thereof by
the Exercise Price resulting from such adjustment.
12.2 For the purpose of making any adjustment required under
this Section 12, the consideration received by the Company for any issue or
sale of securities shall (i) to the extent it consists of cash, be computed
at the gross amount of cash received by the Company before deduction of any
underwriting or similar commissions, compensation or concessions paid or
allowed by the Company in connection with such issue or sale and without
deduction of any expenses payable by the Company, (ii) to the extent it
consists of property other than cash, be computed at the fair market value
of that property as determined in good faith by the Board of Directors of
the Company or any committee thereof, and (iii) if Additional Shares of
Common Stock, Convertible Securities (as defined below) or Options (as
defined below) to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Company for a consideration which covers
both, be computed as the portion of the consideration so received that may
be reasonably determined in good faith by the Board of Directors to be
allocable to such Additional Shares of Common Stock, Convertible Securities
or Options.
12.3 For the purpose of the adjustment required under this
Section 12, if the Company issues or sells any (i) stock or other
securities convertible into or exercisable or exchangeable for Additional
Shares of Common Stock (such convertible, exercisable or exchangeable stock
or securities being herein referred to as "Convertible Securities") or (ii)
rights, options or warrants for the purchase of Additional Shares of Common
Stock or Convertible Securities (such rights, options or warrants being
referred to herein as "Options"), and if the Effective Price of such
Additional Shares of Common Stock is less than the Fair Market Value of a
share of Common Stock immediately prior to the time of the granting of such
Convertible Securities or Options, the Company shall be deemed to have
issued at the time of the issuance of such Options or Convertible
Securities the maximum number of Additional Shares of Common Stock issuable
upon exercise, conversion or exchange thereof and to have received as
consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Company for the
issuance of such Options or Convertible Securities, plus, in the case of
such Options, the minimum amounts of consideration, if any, payable to the
Company upon the exercise of such Options, plus, in the case of Convertible
Securities, the minimum amounts of consideration, if any, payable to the
Company (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities) upon the conversion, exercise or exchange
thereof; provided that if in the case of Convertible Securities the minimum
amounts of such consideration cannot be ascertained, but are a function of
antidilution or similar protective clauses, the Company shall be deemed to
have received the minimum amounts of consideration without reference to
such clauses; provided further that if the minimum amount of consideration
payable to the Company upon the exercise, conversion or exchange of Options
or Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of antidilution
adjustments, the Effective Price shall be recalculated using the figure to
which such minimum amount of consideration is reduced; provided further
that if the minimum amount of consideration payable to the Company upon the
exercise, conversion or exchange of such Options or Convertible Securities
is subsequently increased, the Effective Price shall be again recalculated
using the increased minimum amount of consideration payable to the Company
upon the exercise, conversion or exchange of such Options or Convertible
Securities. No further adjustment of the Exercise Price, as adjusted upon
the issuance of such Options or Convertible Securities, shall be made as a
result of the actual issuance of Additional Shares of Common Stock on the
exercise of any such Options or the conversion, exercise or exchange of any
such Convertible Securities. If any such Options or the conversion
privilege represented by any such Convertible Securities shall expire
without having been exercised, the Exercise Price as adjusted upon the
issuance of such Options or Convertible Securities, shall be readjusted at
the time of such expiration to the Exercise Price which would have been in
effect had an adjustment been made on the basis that the only Additional
Shares of Common Stock so issued were the Additional Shares of Common
Stock, if any, actually issued or sold on the exercise of such Options or
rights of conversion of such Convertible Securities, and such Additional
Shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the granting of
all such Options, whether or not exercised, plus the consideration received
for issuing or selling the Convertible Securities actually converted,
exercised or exchanged, plus the consideration, if any, actually received
by the Company (other than by cancellation of liabilities or obligations
evidenced by such Convertible Securities) on the conversion, exercise or
exchange of such Convertible Securities.
12.4 In case the Company shall declare a dividend or make
any other distribution upon any stock of the Company payable in Common
Stock, Options or Convertible Securities (other than rights or warrants
distributed to all holders of such stock, which shall be treated in
accordance with Section 12.3), any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration, and the Exercise Price then in effect immediately prior to
such dividend declaration or distribution shall be reduced and the number
of Shares issuable upon exercise of a Warrant shall be increased as if the
Company had subdivided its outstanding shares of Common Stock into a
greater number of shares as provided in Section 12.5.
12.5 If the Company at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) its outstanding
shares of Common Stock into a greater number of shares, the number of
Shares issuable upon exercise of a Warrant will be proportionately
increased and the Exercise Price will be proportionately decreased, and if
the Company at any time combines (by reverse stock split, recapitalization
or otherwise) its outstanding shares of Common Stock into a smaller number
of shares, the number of Shares issuable upon exercise of a Warrant will be
proportionately decreased and the Exercise Price will be proportionately
increased.
12.6 Other than ordinary cash dividends or distributions
paid out of the Company's current earnings, which are specifically excluded
from the provisions of this Section 12.6, in the event the Company shall
fix a record date for the making of a dividend or distribution on its
Common Stock payable in cash, securities of other persons, evidences of
indebtedness issued by the Company or other persons, assets or warrants or
rights not referred to in Section 12.4 or 12.5 (the "Other Distribution"),
then, in each such case, at the election of the Company, either (i) the
number of Shares issuable after such record date upon exercise of a Warrant
shall be adjusted by multiplying the number of Shares issuable upon the
exercise of a Warrant immediately prior to such record date by a fraction,
the numerator of which shall be the then Fair Market Value per share of
Common Stock on the record date for such distribution and the denominator
of which shall be the then Fair Market Value per share of Common Stock on
the record date for such distribution less an amount equal to the then fair
market value (as determined in good faith by the Board of Directors of the
Company) of the Other Distribution applicable to one share of Common Stock,
or (ii) adequate provision shall be made so that the Holders of Warrants
shall have the right to receive, in addition to shares of Common Stock upon
the exercise of the Warrants, at the election of the Company, either (A)
the Other Distribution to which such holder would have been entitled as a
holder of Common Stock if such Holder had exercised such Warrant
immediately prior to the record date for such distribution or (B) the cash
equivalent of such Other Distribution. Upon any adjustment in the number of
Shares issuable upon exercise of a Warrant pursuant to clause (i) above,
the Exercise Price shall be equal to the amount obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number
of Shares issuable upon exercise of such Warrant immediately prior to such
adjustment and dividing the product thereof by the number of Shares
issuable upon exercise of such Warrant immediately after such adjustment.
If the Company elects to adjust the number of Shares
issuable upon the exercise of a Warrant pursuant to clause (i) above, such
adjustment shall be made whenever any such distribution is made and shall
become effective on the date of distribution retroactive to the record date
for the determination of stockholders of the Company entitled to receive
such distribution; provided however, that the Company shall deliver to a
Holder who exercises a Warrant after any such record date, but prior to the
related distribution, a due xxxx or other appropriate instrument evidencing
such Holder's right to receive such distribution upon its occurrence.
Notwithstanding the foregoing, the Company shall not elect
the adjustment provided for in clause (i) above if the then fair market
value (as determined in good faith by the Board of Directors of the
Company) of the Other Distribution applicable to one share of Common Stock
is equal to or greater than the then Fair Market Value per share of Common
Stock on the record date of such distribution.
12.7 "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Company or deemed to be issued
pursuant to this Section 12 (whether or not subsequently reacquired or
retired by the Company), other than Excluded Stock.
"Common Stock Outstanding" means, as of any date, the sum of
the number of shares of Common Stock outstanding plus the aggregate number
of shares of Common Stock into which the Company's Class B Common Stock,
par value $.01 per share, and the Company's Class C Common Stock, par value
$.01 per share, are convertible as of such date.
"Excluded Stock" shall mean (i) Common Stock and/or options,
warrants or other Common Stock purchase rights and the Common Stock issued
pursuant to such options, warrants or other rights to employees, officers
or directors of the Company or any subsidiary pursuant to stock purchase or
stock option plans or other compensation arrangements that are approved by
the Board of Directors; (ii) Common Stock issued pursuant to the exercise
of options, warrants or convertible securities outstanding as of the date
of this Agreement or issued in connection with the Plan; (iii) securities
issued as consideration for the acquisition of any person or entity whether
by merger or otherwise; (iv) Common Stock issued pursuant to a transaction
for which an adjustment is made pursuant to Section 11 or Section 12.4 or
12.5; and (v) shares of Common Stock issued for cash in a registered
underwritten offering bona fide offered and sold to the public.
The "Effective Price" of Additional Shares of Common Stock
shall mean the quotient determined by dividing the total number of
Additional Shares of Common Stock issued or sold, or deemed to have been
issued or sold by the Company under this Section 12, into the aggregate
consideration received, or deemed to have been received by the Company for
such issue under this Section 12, for such Additional Shares of Common
Stock.
"Average Price" means, with respect to any shares of stock
or securities, including the Common Stock, on any date of determination,
(i) if the relevant stock or security is listed or admitted for trading on
the New York Stock Exchange or any other national securities exchange, the
average for the twenty (20) Trading Days preceding and including such date
of determination of the last reported sale prices per share on such
national securities exchange or (ii) if the relevant stock or security is
(x) admitted to unlisted trading privileges on any exchange or (y) quoted
on the Nasdaq National Market or any other system of automated
dissemination of quotations of securities prices, the average for the
twenty (20) Trading Days preceding and including the date of determination
of the average of the last reported bid and asked prices per share or
security reported by the National Quotation Bureau or such other system
then in use.
"Fair Market Value" means, with respect to any shares of
stock or other securities, (i) if such stock or securities are listed or
admitted to trading on a national securities exchange or admitted to
unlisted trading privileges on such exchange or quoted in the Nasdaq
System, the Average Price per share or security, as the case may be, at the
close of trading on the Trading Day on which the relevant determination is
to be made (the date of exercise of the Warrant, in the case of any such
determination to be made with respect to such exercise) or, if such day is
not a Trading Day, the Trading Day immediately preceding such day and (ii)
if such stock or security is not so listed or admitted to unlisted trading
privileges, the current fair market value of such stock or security as
determined in good faith by the Board of Directors of the Corporation.
"Trading Day" means (i) if the relevant stock or security is
listed or admitted for trading on the New York Stock Exchange or any other
national securities exchange, a day on which such exchange is open for
business; or (ii) if the relevant stock or security is quoted on the Nasdaq
National Market or any other system of automated dissemination of
quotations of securities prices, a day on which trades may be effected
through such system.
12.8 No adjustment pursuant to this Section 12 need be made
for the adoption of a plan commonly referred to as a "Stockholders' Rights
Plan" which provides for the issuance of rights to acquire shares of
capital stock upon the occurrence of some event that is not within the
control of the rights holders, or the issuance of rights under such plan;
provided that the issuance of capital stock pursuant to such rights shall
require adjustment to the Exercise Price and number of Shares purchasable
upon the exercise hereof.
12.9 Whenever the Exercise Price is adjusted or the number
of Shares purchasable upon the exercise of each Warrant is adjusted, as
herein provided, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Warrant Agent and with each
transfer agent for the Common Stock a copy of such certificate and (c) mail
a brief summary thereof to each Holder of a Warrant Certificate in
accordance with Section 20 hereof. The Warrant Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
12.10 In the event of any adjustments in the Exercise Price
or the number or kind of securities purchasable upon the exercise of the
Warrants, Warrant Certificates theretofore or thereafter issued may
continue to express the same price and number and kind of Shares as are
stated in the Warrant Certificates initially pursuant to this Agreement,
unless a Holder requests in writing that its Warrant Certificate be revised
to reflect such adjustments.
13. Fractional Interests. The Company shall not be required to issue
fractional Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same
Holder, the number of full Shares which shall be issuable upon the exercise
thereof shall be computed on the basis of the aggregate number of Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Share would, except for the provisions of this Section 13, be issuable on
the exercise of any Warrant (or specified portion thereof), the Company
shall pay an amount in cash equal to (a) the Fair Market Value for one
Share, as defined herein, on the day immediately preceding the date the
Warrant is presented for exercise multiplied by (b) such fraction.
14. Agreements of Holders. Every Holder of a Warrant by accepting the same
consents and agrees with the Company and the Warrant Agent and with every
other holder of a Warrant that:
(a) the Warrant Certificates are transferable only on the
registry books of the Warrant Agent if surrendered at the office of the
Warrant Agent designated for such purpose, duly endorsed or accompanied by
a proper instrument of transfer; and
(b) the Company and the Warrant Agent may deem and treat the
person in whose name a Warrant Certificate is registered as the absolute
owner thereof and of the Warrants evidenced thereby (notwithstanding any
notations of ownership or writing on the Warrant Certificates made by
anyone other than the Company or the Warrant Agent) for all purposes
whatsoever, and neither the Company nor the Warrant Agent shall be affected
by any notice to the contrary.
15. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation or other entity into which the Warrant Agent or any successor
Warrant Agent may be merged or with which it may be consolidated, or any
corporation or other entity resulting from any merger or consolidation to
which the Warrant Agent or any successor Warrant Agent shall be a party, or
any corporation or other entity succeeding to the corporate trust or stock
transfer business of the Warrant Agent or any successor Warrant Agent,
shall be the successor to the Warrant Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any
of the parties hereto, provided that such corporation or other entity would
be eligible for appointment as a successor Warrant Agent under the
provisions of Section 17 hereof. In case at the time such successor Warrant
Agent shall succeed to the agency created by this Agreement any of the
Warrant Certificates shall have been countersigned but not delivered, any
such successor Warrant Agent may adopt the countersignature of the
predecessor Warrant Agent and deliver such Warrant Certificates so
countersigned; and, in case at that time any of the Warrant Certificates
shall not have been countersigned, any successor Warrant Agent may
countersign such Warrant Certificate either in the name of the predecessor
or in the name of the successor Warrant Agent; and in all such cases such
Warrant Certificates shall have the full force provided in the Warrant
Certificates in this Agreement.
In case at any time the name of the Warrant Agent shall be changed,
and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates so
countersigned; and, in case at that time any of the Warrant Certificates
shall not have been countersigned, the Warrant Agent may countersign such
Warrant Certificates either in its prior name or in its changed name; and
in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.
16. Warrant Agent. The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all
of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
16.1 The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company and the Warrant Agent assumes
no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it.
16.2 The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or
in the Warrant Certificates to be complied with by the Company.
16.3 The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant
Agent shall incur no liability or responsibility to the Company or to any
holder of any Warrant Certificate in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the opinion
or the advice of such counsel.
16.4 The Warrant Agent shall incur no liability or responsibility to
the Company or to any holder of any Warrant Certificate for any action
taken in reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
16.5 The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution of this Agreement and
to indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for anything done
or omitted by the Warrant Agent in the execution of this Agreement except
as a result of its negligence or bad faith.
16.6 The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of
Warrant Certificates shall furnish the Warrant Agent with reasonable
security and indemnity for any costs and expenses which may be incurred,
but this provision shall not affect the power of the Warrant Agent to take
such action as it may consider proper, whether with or without any such
security or indemnity. All rights of action under this Agreement or under
any of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrant Certificates or the production thereof at
any trial or other proceeding relative thereto, and any such action, suit
or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable
benefit of the registered holders of the Warrants, as their respective
rights or interests may appear.
16.7 The Warrant Agent, and any stockholder, director, officer or
employee thereof, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Warrant Agent under this Agreement. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for the Company or for
any other legal entity.
16.8 The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do
or refrain from doing in connection with this Agreement except for its own
negligence or bad faith.
16.9 The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently pay to the Company all
moneys received by the Warrant Agent on the purchase of Shares through the
exercise of Warrants.
17. Change of Warrant Agent. The Warrant Agent or any successor Warrant
Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail. The
Company may remove the Warrant Agent or any successor Warrant Agent upon
thirty (30) days' notice in writing mailed to the Warrant Agent or
successor Warrant Agent, as the case may be, and to each transfer agent of
the Common Stock by registered or certified mail. If the Warrant Agent
shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Warrant Agent. If the Company
shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent, then the Holder of any Warrant Certificate may apply to any
court of competent jurisdiction for the appointment of a new Warrant Agent.
Notwithstanding any provision to the contrary contained herein, the removal
or resignation of the Warrant Agent will not be effective until such time
as a successor Warrant Agent has been appointed in accordance with the
terms of this Agreement. Any successor Warrant Agent, whether appointed by
the Company or by a court, shall be (a) a corporation or other entity
organized and doing business under the laws of the United States or of the
State of New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in
the State of New York); in good standing, having a principal office in the
State of New York, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Warrant Agent a combined capital and surplus of at least
fifty million dollars ($50,000,000) or (b) an affiliate of a corporation
described in clause (a) of this sentence. After appointment, the successor
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent
without further act or deed; but the predecessor Warrant Agent shall
deliver and transfer to the successor Warrant Agent any property at the
time held by it hereunder and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Warrant Agent and each transfer
agent of the Common Stock and mail a notice thereof in writing to the
Holders of the Warrant Certificates. Failure to give any notice provided
for in this Section 17, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent or
the appointment of the successor Warrant Agent, as the case may be.
18. Issuance of New Warrant Certificates. Notwithstanding any of the
provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing
Warrants in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price per Share and the
number or kind or class of shares or other securities or property,
purchasable under the Warrant Certificates made in accordance with the
provisions of this Agreement.
19. Notice of Certain Events. In case the Company shall propose (a) to pay
any dividend payable in stock of any class to the Holders of Common Stock
or to make any other distribution to the Holders of Common Stock (other
than ordinary cash dividends or distributions paid out of the Company's
current earnings) or (b) to offer to the Holders of Common Stock rights or
warrants to subscribe for or to purchase any additional Shares or shares of
stock of any class or any other securities, rights or options, or (c) to
effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding Shares), or
(d) to effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of more
than fifty percent (50%) of the assets of the Company and its subsidiaries
(taken as a whole) to any other person, or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company shall give to each Holder of a Warrant Certificate, in accordance
with Section 20 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the Holders of the Shares, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause
(a) or (b) above at least twenty (20) days prior to the record date for
determining Holders of the Shares for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation therein
by the Holders of the Shares, whichever shall be the earlier. Failure to
publish, mail or receive such notice or any defect therein or in the
publication or mailing thereof shall not affect the validity of any action
taken in connection with such dividend, distribution or subscription
rights, or such proposed dissolution, liquidation or winding up.
20. Notices. Notices or demands authorized by this Agreement to be given or
made by the Warrant Agent or by the Holder of any Warrant Certificate to or
on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Warrant Agent) as follows:
McLeodUSA Incorporated
0000 X Xxxxxx XX,
Xxxxx Xxxxxx, Xxxx 00000.
Attn: General Counsel
Any notice or demand authorized by this Agreement to be given or made by
the Company or by the Holder of any Warrant Certificate to or on the
Warrant Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:
Xxxxx Fargo Bank Minnesota, N.A.
000 Xxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xx. Xxxx, XX 00000
Attn: Shareowner Relations Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Warrant Agent to the holder of any Warrant Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such Holder at the address of such Holder as shown on the
Warrant Register.
21. Supplements and Amendments. The Company and the Warrant Agent may from
time to time supplement or amend this Agreement without approval of any
holders of Warrant Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, or (iii) to change or
supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable; provided, that, in any such case, such change
or supplement does not adversely affect the interests of the holders of
Warrant Certificates; provided, further, that in no event will an amendment
or supplement to this Agreement that increases the aggregate number of
Shares for which Warrants may be issued under this Agreement to provide for
the treatment of fractional Warrants under the Plan be deemed to adversely
affect the holders of Warrant Certificates. Upon the delivery of a
certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of
this Section 21, the Warrant Agent shall execute such supplement or
amendment.
22. Determination and Actions by the Board of Directors, etc. For all
purposes of this Agreement, any calculation of the total number of shares
of Common Stock Outstanding at any particular time shall be made on a fully
diluted basis. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors, or
the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board of Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Warrant Agent, the Holders of
the Warrant Certificates and all other parties absent manifest error and
(y) not subject the Board of Directors to any liability to the Holders of
the Warrant Certificates.
23. No Rights as Stockholders. Nothing contained in this Agreement or in
any of the Warrants shall be construed as conferring upon the holders or
their transferees any rights whatsoever as stockholders of the Company,
including, without limitation, the right to vote or to receive dividends or
to consent to or to receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or on
any other matter.
24. Registration Rights. Upon receipt of a written request, the Company
agrees to negotiate in good faith to enter into a registration rights
agreement within 90 days of such request with (i) any Holder of Warrants
who, as of the date of issuance of the Warrants, is the beneficial owner of
more than 10% of the outstanding voting stock of the Company or (ii) any
Holder having a representative on the Board of Directors of the Company
resulting in such Holder being deemed to be an affiliate of the Company and
thereby requiring registration rights; provided that the aggregate market
value (based on the Fair Market Value of the Common Stock on the date the
Company receives such request) of the securities of such Holder to be
registered must be at least $5,000,000. Such registration rights agreement
shall provide for limited shelf registration rights to facilitate resales
of Common Stock issuable upon exercise of the Warrants by such Holder and
include customary terms and conditions for such agreements, including
reimbursement of registration expenses and "blackout" periods.
25. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company, the Warrant Agent or the Holders shall bind
and inure to the benefit of their respective successors and assigns
hereunder, whether by merger or otherwise.
26. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent and the Holders any legal or equitable right, remedy or claim
under this Agreement, and this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the Holders of the
Warrants.
27. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated.
28. Governing Law. This Agreement, each Warrant and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and to be performed entirely within such State.
29. Descriptive Headings. Descriptive headings of the several Sections of
this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
30. Counterparts. This Agreement may be executed in any number of
counterparts each of which so executed shall be deemed to be an original;
but such counterparts together shall constitute but one and the same
instrument.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day, month and year first above written.
MCLEODUSA INCORPORATED
By: /s/ Xxxxxxx Rings
------------------------------
Name: Xxxxxxx Rings
Title: Group Vice President
and Chief Legal Officer
XXXXX FARGO BANK MINNESOTA, N.A.,
As Warrant Agent
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
EXHIBIT A
VOID AFTER 5:00 P.M.
NEW YORK CITY TIME, ON
APRIL 16, 2007
No._________ ______ Warrants
WARRANT CERTIFICATE FOR PURCHASE OF
COMMON STOCK OF
MCLEODUSA INCORPORATED
This certifies that, for value received, _______________, or
registered assigns, is the owner of the number of Warrants set forth above,
each of which entitles the owner to purchase, subject to the terms and
conditions hereof and of the Warrant Agreement mentioned below, at any time
after the date hereof and prior to the Expiration Date (as herein defined),
one share of the Class A common stock, par value $.01 per share (the
"Common Stock"), of McLeodUSA Incorporated, a Delaware corporation (the
"Company"), at the exercise price equal to $1.3538462 per share payable (i)
by cashier's check, official bank check or money order made payable to the
order of the Company or wire transfer of funds to an account designated by
the Company or (ii) by the surrender of this Warrant to the Company, with a
duly executed exercise notice marked to reflect "Cashless Exercise," upon
surrender of this Warrant Certificate with the form of Election to Exercise
on the reverse hereof duly completed and executed together with payment of
the exercise price at the office or agency of the Warrant Agent (as defined
in the Warrant Agreement) in the City of South St. Xxxx, State of
Minnesota.
This Warrant Certificate and each Warrant represented hereby are
issued pursuant to, and are subject to all of the terms, provisions and
conditions of, that certain Warrant Agreement dated as of April 12, 2002
(hereinafter called the "Warrant Agreement"), between the Company and the
Warrant Agent, to all of which terms, provisions and conditions the
registered holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement and the summary of its terms set forth on the
reverse side of this Warrant Certificate are hereby incorporated into this
Warrant Certificate by reference and made a part of this Warrant
Certificate. The Warrant Agreement sets forth the terms and conditions
under which the exercise price of a Warrant, the type of shares or other
consideration to be received upon exercise of the Warrant, and/or the
number of shares to be received upon exercise of a Warrant are or may be
adjusted. Reference is hereby made to the Warrant Agreement for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Warrant Agent, the Company and the holders of
the Warrant Certificates or Warrants. In the event of any conflict between
the provisions of this Warrant Certificate and the Warrant Agreement, the
provisions of the Warrant Agreement shall control.
Copies of the Warrant Agreement are available for inspection at the
South St. Xxxx office of the Warrant Agent, Xxxxx Fargo Bank Minnesota, N.A
, or may be obtained upon written request addressed to the Secretary,
McLeodUSA Incorporated, 0000 X Xxxxxx XX, Xxxxx Xxxxxx, Xxxx 00000. The
Company shall not be required upon the exercise of the Warrants evidenced
by this Warrant Certificate to issue fractions of Warrants or shares, but
shall make adjustment therefor in cash on the basis of the Fair Market
Value of any fractional interest as provided in the Warrant Agreement.
The Warrants evidenced by this Warrant Certificate shall expire at
5:00 p.m., New York City time, on April 16, 2007; provided that if such
date shall not be a Business Day (as defined below), then 5:00 P.M., New
York City Time, on the next following day which is a Business Day
("Expiration Date"). As used herein, the term "Business Day" shall mean a
day which is not a Saturday or Sunday and which is not, in the State of New
York, a holiday or a day on which banks are authorized to close.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent, as that term is used in the Warrant Agreement.
Witness the facsimile signatures of the duly authorized officers of
the Company.
DATED: ,
MCLEODUSA INCORPORATED
By:____________________________
President
Attest:________________________
Secretary
COUNTERSIGNED:
XXXXX FARGO BANK MINNESOTA, N.A,
Warrant Agent
By:____________________________
Authorized Signature
SUMMARY OF TERMS OF WARRANT AGREEMENT
The Warrant Agreement provides that, if the initial purchase price set
forth on the face of this Warrant Certificate (the "Exercise Price") is
adjusted from time to time for reasons enumerated in the Warrant Agreement,
the number of shares purchasable upon the exercise of each Warrant
represented by this Warrant Certificate and the type of securities or other
property subject to purchase upon the exercise of each Warrant represented
by this Warrant Certificate are subject to modification or adjustment.
The Warrants evidenced by this Warrant Certificate shall be
exercisable until 5:00 p.m., New York City time, on April 16, 2007;
provided that if such date shall not be a Business Day, then 5:00 P.M., New
York City Time, on the next following day which is a Business Day.
In the event that upon any exercise the number of Warrants exercised
shall be fewer than the total number of Warrants represented hereby, there
shall be issued to holder hereof or his assignee a new Warrant Certificate
evidencing the Warrants not so exercised.
The Company shall not be required to issue fractions of shares or any
certificates which evidence fractional shares. In lieu of a fractional
share there shall be paid to the registered holder of a Warrant with regard
to which the fractional share would be issuable an amount in cash equal to
the same fraction of the Fair Market Value (as determined under the Warrant
Agreement) of a share.
The Company and the Warrant Agent may deem and treat the registered
holder of this Warrant Certificate as the absolute owner hereof and the
Warrants represented by this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone) for the
purpose of any exercise of such Warrants and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice
to the contrary.
Prior to the exercise of the Warrants represented hereby, the
registered holder of this Warrant Certificate, as such, shall not be
entitled to vote on or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose, and nothing contained in the Warrant Agreement or
herein shall be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a stockholder of the Company,
including, without limitation, the right to vote upon any matter submitted
to stockholders of the Company, to receive dividends or other
distributions, to exercise any preemptive rights or to receive any notice
of any proceedings of the Company (except as provided in the Warrant
Agreement).
Upon surrender of this Warrant Certificate with the form of Assignment
below duly completed, accompanied by payment of an amount equal to any
applicable transfer tax, at the office or agency of the Warrant Agent
indicated on the face of this Warrant Certificate, a new Warrant
Certificate or Certificates representing the Warrants represented by this
Warrant Certificate shall be issued to the transferee; provided, however,
that if the registered holder of this Warrant Certificate elects to
transfer fewer than all of the Warrants represented by this Warrant
Certificate, a new Warrant Certificate for the Warrants not so transferred
shall be issued to such registered holder. This Warrant Certificate,
together with other Warrant Certificates, may be exchanged by the
registered holder for another Warrant Certificate or Certificates of
different denominations, of like tenor and representing in the aggregate
Warrants equal in number to the same full number of Warrants represented by
this Warrant Certificate and any other Warrant Certificate so exchanged
with the form of Assignment duly completed and executed. Certificates for
fractions of a Warrant will not be issued upon any exchange or transfer.
If the day of receipt of this Warrant Certificate with the form of
Election to Exercise duly filled in and executed, accompanied by payment of
the Exercise Price (either in cash or pursuant to a "Cashless Exercise")
for the shares specified in the form of Election to Exercise (and of an
amount to any applicable taxes or governmental charges), shall occur within
any period during which the transfer books for the Company's Common Stock
or other class of stock purchasable upon the exercise of the Warrants
evidenced by this Warrant Certificate are closed for any purpose, the
Company shall not be required to make delivery of certificates for shares
purchasable upon such exercise, and the person entitled to receive delivery
of such certificates shall not be deemed to have become a holder of record
of such shares, until the next succeeding Business Day on which the
transfer books of the Company are open.
To be printed on reverse side of Warrant Certificate
FORM OF ELECTION TO EXERCISE
Cashless Exercise _______ NO _______ YES
(See Section 5(c) of the Warrant Agreement)
The undersigned hereby irrevocably elects to exercise Warrants
evidenced by this Warrant Certificate, and to purchase full shares
(the "Shares"), of the Class A common stock, par value $.01 per share (the
"Common Stock") of McLeodUSA Incorporated, a Delaware corporation (the
"Company"), issuable upon exercise of such Warrants, and, unless "Cashless
Exercise" is marked "Yes" above, herewith tenders payment for such Shares
in the amount of $ in accordance with the terms hereof. The
undersigned requests that a certificate for such Shares be registered in
the name of whose address is ,
and whose social security number or other identifying number is ,
and that such certificate be delivered to
whose address is . If said number
of Shares is less than all of the Shares purchasable hereunder, the
undersigned requests that a new Warrant Certificate evidencing the right to
purchase the remaining balance of the Shares of Common Stock for which this
Warrant Certificate is exercisable be registered in the name of
whose address is and whose
social security number or other identifying number is ,
. Any check representing payment to be paid by the
Company in lieu of fractional shares should be made payable to
and should be delivered to whose address is
.
Name of registered holder of Warrant:
(Please print)
Address:
(Please print)
Signature(s):
NOTE: Theabove signature(s) must
correspond with the name
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever. If this Warrant is
held of record by two or more
joint owners, all such owners
must sign.
Dated: , 200_
Signature Guarantee:
(All signatures should be guaranteed
by an eligible guarantor institution
(Banks, Stockbrokers, Savings and
Loan Associations and Credit Unions
with membership in an approved signature
guarantee medallion program), pursuant
to SEC Rule 17Ad-15)
FORM OF ASSIGNMENT
(To be signed only upon assignment of Warrant Certificate)
FOR VALUE RECEIVED, hereby sells, assigns
and transfers unto
whose address is and whose
social security number or other identifying number is ,
the Warrant Certificate, together with all right, title and interest
therein and to the Warrants represented thereby, and does hereby
irrevocably constitute and appoint ,
attorney, to transfer said Warrant Certificate on the books of the Company,
with full power of substitution in the premises.
Signature(s)
NOTE: The above signature(s) must
correspond with the name
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever. If this Warrant is
held of record by two or more
joint owners, all such owners
must sign.
Dated: , 200_
Signature Guarantee:
(All signatures should be guaranteed by
an eligible guarantor institution
(Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions with
membership in an approved signature
guarantee medallion program), pursuant
to SEC Rule 17Ad-15)
