-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LKhyg6l2IHXWg8vMdUXJH0//WnjcAutxyFjeZBtyGhDbN8aBbL1S3iokvOUurj7/ Tzup5xkwrRUGcchlYZa7YA== 0000895345-02-000193.txt : 20020422 0000895345-02-000193.hdr.sgml : 20020422 ACCESSION NUMBER: 0000895345-02-000193 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20020422 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MCLEODUSA INC CENTRAL INDEX KEY: 0000919943 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 421407240 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-46203 FILM NUMBER: 02617462 BUSINESS ADDRESS: STREET 1: 6400 C ST SW STREET 2: PO BOX 3177 CITY: CEDAR RAPIDS STATE: IA ZIP: 52406 BUSINESS PHONE: 3193640000 MAIL ADDRESS: STREET 1: 6400 C ST SW STREET 2: PO BOX 3177 CITY: CEDAR RAPIDS STATE: IA ZIP: 52406 FORMER COMPANY: FORMER CONFORMED NAME: MCLEOD INC DATE OF NAME CHANGE: 19960403 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FORSTMANN LITTLE & CO SUB DEBT & EQ MGMT BUYOUT PAR VII LP CENTRAL INDEX KEY: 0001095466 IRS NUMBER: 134002846 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: WINSTON HUTCHINS STREET 2: 767 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2123555656 MAIL ADDRESS: STREET 1: WINSTON HUTCHINS STREET 2: 767 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10153 SC 13D/A 1 adrev13da.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 4)* MCLEODUSA INCORPORATED - --------------------------------------------------------------------------- (Name of Issuer) CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE - --------------------------------------------------------------------------- (Title of Class of Securities) 582266 10 2 - --------------------------------------------------------------------------- (CUSIP Number) FRIED, FRANK, HARRIS, FORSTMANN LITTLE & CO. SUBORDINATED DEBT SHRIVER & JACOBSON & EQUITY MANAGEMENT BUYOUT ONE NEW YORK PLAZA PARTNERSHIP-VI, L.P. NEW YORK, NY 10004 FORSTMANN LITTLE & CO. SUBORDINATED DEBT ATTN: STEPHEN FRAIDIN, ESQ. & EQUITY MANAGEMENT BUYOUT (212) 859-8000 PARTNERSHIP-VII, L.P. FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V, L.P. FORSTMANN LITTLE & CO. SUBORDINATED DEBT & EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VIII, L.P. FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-VII, L.P. THEODORE J. FORSTMANN THOMAS H. LISTER C/O FORSTMANN LITTLE & CO. 767 FIFTH AVENUE NEW YORK, NY 10153 ATTN: MR. WINSTON W. HUTCHINS (212) 355-5656 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) APRIL 16, 2002 ------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [_] Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 2 of 34 - -------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VI, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 19,861,662* BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 24,383,737** 10 SHARED DISPOSITIVE POWER 0 *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 3 of 34 - -------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 24,383,737** 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.0% 14 TYPE OF REPORTING PERSON* PN * Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VI, L.P. ("MBO-VI") holds 24,383,737 shares of McLeodUSA's Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"), Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VII, L.P. ("MBO-VII") holds 53,819,398 shares of Class B Common Stock, and Forstmann Little & Co. Equity Partnership-V, L.P. ("Equity-V") holds 35,546,879 shares of McLeodUSA's Class C Common Stock, par value $0.01 per share (the "Class C Common Stock"), which constitute all of the shares of Class B Common Stock and Class C Common Stock outstanding. The Class B Common Stock and the Class C Common Stock, in the aggregate, are convertible into 113,750,014 shares of McLeodUSA's Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"). However, the number of shares of Class A Common Stock into which the Class B Common Stock is convertible, and therefore, the voting power represented thereby on an as converted basis, is not calculable at the present time (see footnote ** below). Pursuant to McLeodUSA's Second Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation"), until conversion, the holders of shares of Class B Common Stock are entitled to cast that number of votes that is equal to 56% of the aggregate number of votes which could be cast by the holders of the Class B Common Stock and Class C Common Stock, taken together, if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote. The number contained in line 7 is the voting power represented by the Class B Common Stock held by MBO-VI assuming no conversion into Class A Common Stock. ** This number is the number of shares of Class B Common Stock issued by McLeodUSA to MBO-VI. Pursuant to the Certificate of Incorporation, the 113,750,014 shares of Class B Common Stock and Class C Common Stock issued by McLeodUSA to MBO-VI, MBO-VII and Equity-V are convertible into an aggregate of 113,750,014 shares of Class A Common Stock. However, the portion of the 113,750,014 shares of Class A Common Stock into which the shares of Class B Common Stock are convertible is calculated in accordance with a formula set forth in the Certificate of Incorporation, which formula is dependent on the fair market value of a share of Class A Common Stock at the time of conversion and the timing of the conversion. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 4 of 34 - -------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VII, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 43,838,346* BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 53,819,398** *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 5 of 34 - -------------------- 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 53,819,398** 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 24.9% 14 TYPE OF REPORTING PERSON* PN * Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VI, L.P. ("MBO-VI") holds 24,383,737 shares of McLeodUSA's Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"), Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VII, L.P. ("MBO-VII") holds 53,819,398 shares of Class B Common Stock, and Forstmann Little & Co. Equity Partnership-V, L.P. ("Equity-V") holds 35,546,879 shares of McLeodUSA's Class C Common Stock, par value $0.01 per share (the "Class C Common Stock"), which constitute all of the shares of Class B Common Stock and Class C Common Stock outstanding. The Class B Common Stock and the Class C Common Stock, in the aggregate, are convertible into 113,750,014 shares of McLeodUSA's Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"). However, the number of shares of Class A Common Stock into which the Class B Common Stock is convertible, and therefore, the voting power represented thereby on an as converted basis, is not calculable at the present time (see footnote ** below). Pursuant to McLeodUSA's Second Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation"), until conversion, the holders of shares of Class B Common Stock are entitled to cast that number of votes that is equal to 56% of the aggregate number of votes which could be cast by the holders of the Class B Common Stock and Class C Common Stock, taken together, if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote. The number contained in line 7 is the voting power represented by the Class B Common Stock held by MBO-VII assuming no conversion into Class A Common Stock. ** This number is the number of shares of Class B Common Stock issued by McLeodUSA to MBO-VII. Pursuant to the Certificate of Incorporation, the 113,750,014 shares of Class B Common Stock and Class C Common Stock issued by McLeodUSA to MBO-VI, MBO-VII and Equity-V are convertible into an aggregate of 113,750,014 shares of Class A Common Stock. However, the portion of the 113,750,014 shares of Class A Common Stock into which the shares of Class B Common Stock are convertible is calculated in accordance with a formula set forth in the Certificate of Incorporation, which formula is dependent on the fair market value of a share of Class A Common Stock at the time of conversion and the timing of the conversion. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 6 of 34 - -------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 50,050,006* BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 35,546,879** *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 7 of 34 - -------------------- 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 35,546,879** 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.9% 14 TYPE OF REPORTING PERSON* PN * Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VI, L.P. ("MBO-VI") holds 24,383,737 shares of McLeodUSA's Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"), Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VII, L.P. ("MBO-VII") holds 53,819,398 shares of Class B Common Stock, and Forstmann Little & Co. Equity Partnership-V, L.P. ("Equity-V") holds 35,546,879 shares of McLeodUSA's Class C Common Stock, par value $0.01 per share (the "Class C Common Stock), which constitute all of the shares of Class B Common Stock and Class C Common Stock outstanding. The Class B Common Stock and the Class C Common Stock, in the aggregate, are convertible into 113,750,014 shares of McLeodUSA's Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"). However, the number of shares of Class A Common Stock into which the Class C Common Stock is convertible, and therefore, the voting power represented thereby on an as converted basis, is not calculable at the present time (see footnote ** below). Pursuant to McLeodUSA's Second Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation"), until conversion, the holders of shares of Class C Common Stock are entitled to cast that number of votes that is equal to 44% of the aggregate number of votes which could be cast by the holders of the Class B Common Stock and Class C Common Stock, taken together, if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote. The number contained in line 7 is the voting power represented by the Class C Common Stock held by Equity-V assuming no conversion into Class A Common Stock. ** This number is the number of shares of Class C Common Stock issued by McLeodUSA to Equity-V. Pursuant to the Certificate of Incorporation, the 113,750,014 shares of Class B Common Stock and Class C Common Stock issued by McLeodUSA to MBO-VI, MBO-VII and Equity-V are convertible into an aggregate of 113,750,014 shares of Class A Common Stock. However, the portion of the 113,750,014 shares of Class A Common Stock into which the shares of Class C Common Stock are convertible is calculated in accordance with a formula set forth in the Certificate of Incorporation, which formula is dependent on the fair market value of a share of Class A Common Stock at the time of conversion and the timing of the conversion. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 8 of 34 - -------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VIII, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 36,070,071 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 36,070,071 *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 9 of 34 - -------------------- 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,070,071 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.1% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 10 of 34 - -------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-VII, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF 7 SOLE VOTING POWER SHARES 60,116,784 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 60,116,784 *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 11 of 34 - -------------------- 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 60,116,784 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.1% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 12 of 34 - -------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON THEODORE J. FORSTMANN 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES NUMBER OF 7 SOLE VOTING POWER SHARES 181,250 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 181,250 *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 13 of 34 - -------------------- 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 181,250 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0% 14 TYPE OF REPORTING PERSON* IN SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 14 of 34 - -------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON THOMAS H. LISTER 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES NUMBER OF 7 SOLE VOTING POWER SHARES 125,000 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 125,000 *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - -------------------- CUSIP NO. 582266102 Page 15 of 34 - -------------------- 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 125,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0% 14 TYPE OF REPORTING PERSON* IN This Amendment No. 4, filed on behalf of Forstmann Little & Co. Subordinated Debt & Equity Management Buyout Partnership-VI, L.P., a Delaware limited partnership ("MBO-VI"), Forstmann Little & Co. Subordinated Debt & Equity Management Buyout Partnership-VII, L.P., a Delaware limited partnership ("MBO-VII"), Forstmann Little & Co. Equity Partnership-V, L.P., a Delaware limited partnership ("Equity-V" and, together with MBO-VI and MBO-VII, the "FL Partnerships"), Forstmann Little & Co. Subordinated Debt & Equity Management Buyout Partnership-VIII, L.P., a Delaware limited partnership ("MBO-VIII"), Forstmann Little & Co. Equity Partnership-VII, L.P., a Delaware limited partnership ("Equity-VII"), Theodore J. Forstmann ("Mr. Forstmann") and Thomas H. Lister ("Mr. Lister" and, together with the FL Partnerships, MBO-VIII, Equity-VII and Mr. Forstmann, the "Reporting Persons"), amends and supplements the Schedule 13D filed on behalf of the FL Partnerships with the Securities and Exchange Commission on September 22, 1999 (as amended by Amendment No. 1 filed on October 2, 2001, Amendment No. 2 filed on December 7, 2001 and Amendment No. 3 filed on February 4, 2002, the "Schedule 13D"), relating to the Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"), of McLeodUSA Incorporated, a Delaware corporation ("McLeodUSA"). The Reporting Persons have entered into a Joint Filing Agreement, dated April 22, 2002, a copy of which is filed as Exhibit 27 hereto. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Schedule 13D. ITEM 2. Identity and Background ----------------------- Item 2 is hereby amended to add the following: ITEM 2. (a), (b), (c) ------------- MBO-VIII and Equity-VII (together, the "2001 FL Partnerships") are Delaware limited partnerships which are private investment firms. Information with respect to the identity, address and background of the general partners of each of the 2001 FL Partnerships is set forth on Schedule I attached hereto. The address of the principal business and principal office of each of the 2001 FL Partnerships is c/o Forstmann Little & Co., 767 Fifth Avenue, New York, New York 10153. Mr. Lister's present principal occupation is acting as a general partner of FLC XXXI, a New York limited partnership doing business as Forstmann Little & Co. The principal business address of Mr. Lister is c/o Forstmann Little & Co., 767 Fifth Avenue, New York, New York 10153. ITEM 2. (d), (e), (f) ------------- During the last five years, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any person identified in Schedule I, has (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Each of the 2001 FL Partnerships is a Delaware limited partnership. Mr. Lister is a citizen of the United States of America. Each of the 2001 FL Partnerships has the sole power to direct the vote and disposition of all of the shares of Class A Common Stock beneficially owned by it. Each of Mr. Forstmann and Mr. Lister has the sole power to direct the vote and disposition of all of the shares of Class A Common Stock beneficially owned by him. The general partner of MBO-VIII is FLC XXXIII. FLC XXXIII is also the general partner of MBO-VII. The general partner of Equity-VII is FLC XXXII Partnership, L.P., a New York limited partnership ("FLC XXXII"). The general partners of FLC XXXII, including Mr. Forstmann and Mr. Lister, are also the general partners of FLC XXXIII as well as of the general partner of MBO-VI. Certain of the general partners of FLC XXXII and FLC XXXIII, including Mr. Forstmann and Mr. Lister, are also the general partners of the general partner of Equity-V. Accordingly, the FL Partnerships, the 2001 FL Partnerships, Mr. Forstmann and Mr. Lister are jointly making this filing because they may be deemed to constitute a group within the meaning of Section 13(d)(3) of the Act. Neither the fact of this filing nor anything contained herein shall be deemed an admission by the Reporting Persons that such a group exists, and the existence of any such group is hereby expressly disclaimed. The FL Partnerships, the 2001 FL Partnerships and Mr. Lister have no beneficial interest in any shares of Class A Common Stock owned beneficially by Mr. Forstmann and, accordingly, each of the FL Partnerships, the 2001 FL Partnerships and Mr. Lister hereby expressly disclaims beneficial ownership in any such shares of Class A Common Stock. The FL Partnerships, the 2001 FL Partnerships and Mr. Forstmann have no beneficial interest in any shares of Class A Common Stock owned beneficially by Mr. Lister and, accordingly, each of the FL Partnerships, the 2001 FL Partnerships and Mr. Forstmann hereby expressly disclaims beneficial ownership in any such shares of Class A Common Stock. ITEM 3. Source and Amount of Funds or Other Consideration ------------------------------------------------- Item 3 is hereby amended to add the following at the end thereof: As more fully described in Item 4 below, on April 16, 2002, the Restructuring was consummated. The Series D Preferred held by MBO-VI and MBO-VII was converted into an aggregate of 78,203,135 shares of Class B Common Stock, par value $0.01 per share, of McLeodUSA (the "Class B Common stock"), and the Series E Preferred held by Equity-V was converted into 35,546,879 shares of Class C Common Stock, par value $0.01 per share, of McLeodUSA (the "Class C Common Stock"). The 2001 FL Partnerships purchased from McLeodUSA, for an aggregate purchase price of $175 million, (i) 74,027,764 shares of Class A Common Stock, (ii) 10 shares of Series B Preferred and (iii) Warrants, with an aggregate exercise price of $30 million, to purchase 22,159,091 shares of Class A Common Stock. The 2001 FL Partnerships obtained the funds used to purchase the shares of Class A Common Stock, shares of Series B Preferred and Warrants from capital contributions made by the partners of each of the 2001 FL Partnerships. Pursuant to the Management Incentive Plan adopted by the Board of Directors of McLeodUSA in connection with the consummation of the Restructuring, (i) McLeodUSA granted to Mr. Forstmann options to purchase shares of Class A Common Stock in consideration for his services as a director of McLeodUSA and as the chairman of the Executive Committee of the Board of Directors of McLeodUSA and (ii) McLeodUSA granted to Mr. Lister options to purchase shares of Class A Common Stock in consideration for his services as a director of McLeodUSA. As of the date hereof, 181,250 of Mr. Forstmann's options have vested and become presently exercisable and 125,000 of Mr. Lister's options have vested and become presently exercisable. All of the options previously granted by McLeodUSA to Mr. Forstmann and Mr. Lister, whether or not vested, were cancelled in the Restructuring. ITEM 4. Purpose of Transaction ---------------------- Item 4 is hereby amended to delete the last paragraph thereof and replace it with the following: On April 16, 2002, the Restructuring was consummated and, among other things: (i) the shares of Series D Preferred held by MBO-VI were converted into 24,383,737 shares of Class B Common Stock, the shares of Series D Preferred held by MBO-VII were converted into 53,819,398 shares of Class B Common Stock and the shares of Series E Preferred held by Equity-V were converted into 35,546,879 shares of Class C Common Stock; (ii) all of the options previously granted by McLeodUSA, including those previously granted to Mr. Forstmann and Mr. Lister, were cancelled; and (iii) the 2001 FL Partnerships purchased from McLeodUSA, for an aggregate purchase price of $175 million, (i) 74,027,764 shares of Class A Common Stock, (ii) 10 shares of Series B Preferred and (iii) Warrants, with an aggregate exercise price of $30 million, to purchase 22,159,091 shares of Class A Common Stock. A copy of McLeodUSA's Second Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation"), which, among other things, sets forth the rights and restrictions pertaining to the Class B Common Stock and Class C Common Stock, is filed as Exhibit 21 hereto and is incorporated herein by reference. A copy of the Certificate of Designation of the Power, Preferences and Relative, Participating, Optional and Other Special Rights of Series B Preferred Stock and Qualifications, Limitations and Restrictions Thereof (the "Series B Certificate of Designation") is filed as Exhibit 22 hereto and is incorporated herein by reference. The Series B Certificate of Designation supersedes the Form of Series B Certificate of Designation previously filed as Exhibit 19 hereto. A copy of the Warrant Agreement, dated as of April 12, 2002, between McLeodUSA and Wells Fargo Bank Minnesota, N.A., as the Warrant agent, is filed as Exhibit 23 hereto and is incorporated herein by reference. The Warrant Agreement and Form of Warrant attached thereto supersede the Form of Common Stock Purchase Warrant previously filed as Exhibit 20 hereto. Mr. Forstmann and Mr. Lister were designated by the 2001 FL Partnerships to the Board of Directors of McLeodUSA and T. Geoffrey McKay was designated by each of the FL Partnerships as its Representative. Mr. Forstmann was designated to serve as the chairman of the Executive Committee of the Board of Directors of McLeodUSA. In connection with the consummation of the Restructuring, McLeodUSA, the 2001 FL Partnerships and the FL Partnerships entered into an amendment to the Amended and Restated Purchase Agreement, dated as of April 16, 2002 (the "Amendment"), by which they agreed, among other things, that (i) in the event that the 2001 FL Partnerships beneficially own less than 10% of the shares of Class A Common Stock beneficially owned by them immediately following the closing of the Restructuring (calculated as set forth in the Series B Certificate of Designation) but beneficially own at least one share of Class A Common Stock, then the 2001 FL Partnerships will be entitled to designate two non-voting observers to the Board of Directors of McLeodUSA (the "Board Observers"), and (ii) in the event that the 2001 FL Partnerships become entitled to designate any Board Observer, whether pursuant to the Series B Certificate of Designation or pursuant to the Amended and Restated Purchase Agreement, as amended, such Board Observer will be entitled to the same rights, which are described above in this Item 4 and set forth in the Amended and Restated Purchase Agreement, as amended, to which the Representatives designated by the FL Partnerships are entitled pursuant to the Amended and Restated Purchase Agreement, as amended. The foregoing description of the Amendment is not intended to be complete and is qualified in its entirety by the complete text of the Amendment, which is incorporated herein by reference. A copy of the Amendment is filed as Exhibit 24 hereto. As contemplated by the Amended and Restated Purchase Agreement, as amended, in connection with the consummation of the Restructuring, McLeodUSA and the FL Partnerships executed and delivered a termination agreement, dated as of April 16, 2002 (the "Termination Agreement"), in which the parties agreed, among other things, that (i) the Exchange Agreement is terminated in its entirety and is of no further force and effect except with respect to the reimbursement by McLeodUSA of any unreimbursed expenses of the director designees of the FL Partnerships as provided in the Exchange Agreement and (ii) the 2001 Registration Rights Agreement, which had been entered into by the FL Partnerships and McLeodUSA in connection with the receipt by the FL Partnerships of shares of Series D Preferred and Series E Preferred, remains in effect and is amended to cover the shares of Class B Common Stock and Class C Common Stock into which the shares of Series D Preferred and Series E Preferred, respectively, were converted pursuant to the terms of the Restructuring. The foregoing description of the Termination Agreement is not intended to be complete and is qualified in its entirety by the complete text of the Termination Agreement, which is incorporated herein by reference. A copy of the Termination Agreement is filed as Exhibit 25 hereto. As contemplated by the Amended and Restated Purchase Agreement, as amended, in connection with the consummation of the Restructuring, McLeodUSA and the 2001 FL Partnerships entered into a registration rights agreement, dated as of April 16, 2002 (the "2002 Registration Rights Agreement"), pursuant to which McLeodUSA granted to the 2001 FL Partnerships three demand rights to require McLeodUSA to register under the Securities Act of 1933, as amended, all or part of the Registrable Securities (as defined below) held by the 2001 FL Partnerships. McLeodUSA has the right to delay any such registration once in any six-month period for a reasonable period of time (but not exceeding 60 days) under certain circumstances. In addition, if McLeodUSA proposes to register any of its securities for the account of any other stockholder (other than in connection with an employee benefit plan, dividend reinvestment plan, merger or consolidation), the 2001 FL Partnerships may require McLeodUSA to include all or a portion of their Registrable Securities in such registration, subject to certain priorities among them and to certain limitations. All expenses incurred in connection with such registrations (other than underwriting discounts and commissions) will be borne by McLeodUSA. "Registrable Securities," with respect to the 2002 Registration Rights Agreement, means (i) any shares of Common Stock (as defined in the 2002 Registration Rights Agreement) owned by the 2001 FL Partnerships, (ii) any shares of Common Stock issued or issuable upon the conversion, exercise or exchange of the Warrants or any other Common Stock equivalents at any time held by the 2001 FL Partnerships, and (iii) any shares of Common Stock issued with respect to the Common Stock referred to in clauses (i) or (ii) by way of a stock dividend, stock split or reverse stock split or in connection with a combination of shares, recapitalization, merger, consolidation or otherwise. The foregoing description of the 2002 Registration Rights Agreement is not intended to be complete and is qualified in its entirety by the complete text of the 2002 Registration Rights Agreement, which is incorporated herein by reference. A copy of the 2002 Registration Rights Agreement is filed as Exhibit 26 hereto. Depending on various factors, including, without limitation, the Reporting Persons' financial position and investment strategy, the price levels of the McLeodUSA common stock, conditions in the securities markets and general economic and industry conditions, each of the Reporting Persons may in the future take such actions with respect to its investment in McLeodUSA as it deems appropriate, including, without limitation, purchasing additional shares of McLeodUSA common stock or selling some or all of its McLeodUSA common stock or taking any actions that might result in any of the matters set forth in subparagraphs (a)-(j) of Item 4, in each case consistent with their obligations under their agreements with McLeodUSA. ITEM 5. Interest in Securities of the Issuer ------------------------------------ Item 5 is hereby amended in its entirety as follows: The following information is as of April 16, 2002: (i) MBO-VI: (a) Amount Beneficially Owned: MBO-VI directly owns 24,383,737 shares of Class B Common Stock. FLC XXIX is the general partner of MBO-VI. Theodore J. Forstmann, Sandra J. Horbach, Thomas H. Lister, Winston W. Hutchins, Jamie C. Nicholls (each a United States citizen with his or her principal place of business being at the address set forth in response to Item 2(b) of this statement), and Gordon Holmes (a citizen of the Republic of Ireland with his principal place of business being at the address set forth in response to Item 2(b) of this statement), are the general partners of FLC XXIX. The shares of Class B Common Stock owned by MBO-VI represent approximately 13.0% of the Class A Common Stock outstanding, based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended, and there being 162,499,986 shares of Class A Common Stock outstanding as of April 16, 2002 as disclosed by McLeodUSA in its Disclosure Statement with respect to the Amended Plan of Reorganization of McLeodUSA, filed on February 28, 2002 with the United States Bankruptcy Court for the District of Delaware (the "Disclosure Statement"), and confirmed by the Findings of Fact, Conclusions of Law, and Order Under 11 U.S.C. Sections 1129(a) and (b) and Fed. R. Bankr. P. 3020 Confirming Plan of Reorganization of McLeodUSA, filed on April 5, 2002 by the United States Bankruptcy Court for the District of Delaware (the "Confirmation Order"). (b) The number of shares of Class B Common Stock as to which MBO-VI has: (i) sole power to vote or to direct the vote - 19,861,662[FN1]. (ii) shared power to vote or to direct the vote -- None. (iii) sole power to dispose or to direct the disposition of - 24,383,737[FN2]. (iv) shared power to dispose or to direct the disposition of -- None. (ii) MBO-VII: - --------- [FN] 1 The number of shares of Class A Common Stock into which the Class B Common Stock is convertible, and therefore, the voting power represented thereby on an as converted basis, is not calculable at the present time (see footnote 2 below). Pursuant to the Certificate of Incorporation, until conversion, the holders of shares of Class B Common Stock are entitled to cast that number of votes that is equal to 56% of the aggregate number of votes which could be cast by the holders of the Class B Common Stock and Class C Common Stock, taken together, if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote. The number contained in this Item 5-(i)(b)(i) is the voting power represented by the Class B Common Stock held by MBO-VI assuming no conversion into Class A Common Stock. [FN] 2 This number is the number of shares of Class B Common Stock issued by McLeodUSA to MBO-VI. Pursuant to the Certificate of Incorporation, the 113,750,014 shares of Class B Common Stock and Class C Common Stock issued by McLeodUSA to MBO-VI, MBO-VII and Equity-V are convertible into an aggregate of 113,750,014 shares of Class A Common Stock. However, the portion of the 113,750,014 shares of Class A Common Stock into which the shares of Class B Common Stock are convertible is calculated in accordance with a formula set forth in the Certificate of Incorporation, which formula is dependent on the fair market value of a share of Class A Common Stock at the time of conversion and the timing of the conversion. (a) Amount Beneficially Owned: MBO-VII directly owns 53,819,398 shares of Class B Common Stock. FLC XXXIII is the general partner of MBO-VII. Theodore J. Forstmann, Sandra J. Horbach, Thomas H. Lister, Winston W. Hutchins, Jamie C. Nicholls (each a United States citizen with his or her principal place of business being at the address set forth in response to Item 2(b) of this statement) and Gordon Holmes (a citizen of the Republic of Ireland with his principal place of business being at the address set forth in response to Item 2(b) of this statement), are the general partners of FLC XXXIII. The shares of Class B Common Stock owned by MBO-VII represent approximately 24.9% of the Class A Common Stock outstanding, based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended, and there being 162,499,986 shares of Class A Common Stock outstanding as of April 16, 2002 as disclosed by McLeodUSA in its Disclosure Statement and confirmed by the Confirmation Order. (b) The number of shares of Class B Common Stock as to which MBO-VII has: (i) sole power to vote or to direct the vote - 43,838,346[FN3]. (ii) shared power to vote or to direct the vote -- None. (iii) sole power to dispose or to direct the disposition of - 53,819,398[FN4]. (iv) shared power to dispose or to direct the disposition of -- None. (iii) Equity-V: - --------- [FN] 3 The number of shares of Class A Common Stock into which the Class B Common Stock is convertible, and therefore, the voting power represented thereby on an as converted basis, is not calculable at the present time (see footnote 4 below). Pursuant to the Certificate of Incorporation, until conversion, the holders of shares of Class B Common Stock are entitled to cast that number of votes that is equal to 56% of the aggregate number of votes which could be cast by the holders of the Class B Common Stock and Class C Common Stock, taken together, if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote. The number contained in this Item 5-(ii)(b)(i) is the voting power represented by the Class B Common Stock held by MBO-VII assuming no conversion into Class A Common Stock. [FN] 4 This number is the number of shares of Class B Common Stock issued by McLeodUSA to MBO-VII. Pursuant to the Certificate of Incorporation, the 113,750,014 shares of Class B Common Stock and Class C Common Stock issued by McLeodUSA to MBO-VI, MBO-VII and Equity-V are convertible into an aggregate of 113,750,014 shares of Class A Common Stock. However, the portion of the 113,750,014 shares of Class A Common Stock into which the shares of Class B Common Stock are convertible is calculated in accordance with a formula set forth in the Certificate of Incorporation, which formula is dependent on the fair market value of a share of Class A Common Stock at the time of conversion and the timing of the conversion. (a) Amount Beneficially Owned: Equity-V directly owns 35,546,879 shares of Class C Common Stock. FLC XXX is the general partner of Equity-V. Theodore J. Forstmann, Sandra J. Horbach, Thomas H. Lister and Winston W. Hutchins (each a United States citizen with his or her principal place of business being at the address set forth in response to Item 2(b) of this statement) are the general partners of FLC XXX. The shares of Class C Common Stock owned by Equity-V represent approximately 17.9% of the Class A Common Stock outstanding, based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended, and there being 162,499,986 shares of Class A Common Stock outstanding as of April 16, 2002 as disclosed by McLeodUSA in its Disclosure Statement and confirmed by the Confirmation Order. (b) The number of shares of Class C Common Stock as to which Equity-V has: (i) sole power to vote or to direct the vote - 50,050,006[FN5]. (ii) shared power to vote or to direct the vote -- None. (iii) sole power to dispose or to direct the disposition of - 35,546,879[FN6]. (iv) shared power to dispose or to direct the disposition of -- None. (iv) MBO-VIII: - --------- [FN]5 The number of shares of Class A Common Stock into which the Class C Common Stock is convertible, and therefore, the voting power represented thereby on an as converted basis, is not calculable at the present time (see footnote 6 below). Pursuant to the Certificate of Incorporation, until conversion, the holders of shares of Class C Common Stock are entitled to cast that number of votes that is equal to 44% of the aggregate number of votes which could be cast by the holders of the Class B Common Stock and Class C Common Stock, taken together, if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote. The number contained in this Item 5-(iii)(b)(i) is the voting power represented by the Class C Common Stock held by Equity-V assuming no conversion into Class A Common Stock. [FN]6 This number is the number of shares of Class C Common Stock issued by McLeodUSA to Equity-V. Pursuant to the Certificate of Incorporation, the 113,750,014 shares of Class B Common Stock and Class C Common Stock issued by McLeodUSA to MBO-VI, MBO-VII and Equity-V are convertible into an aggregate of 113,750,014 shares of Class A Common Stock. However, the portion of the 113,750,014 shares of Class A Common Stock into which the shares of Class C Common Stock are convertible is calculated in accordance with a formula set forth in the Certificate of Incorporation, which formula is dependent on the fair market value of a share of Class A Common Stock at the time of conversion and the timing of the conversion. (a) Amount Beneficially Owned: MBO-VIII directly owns (i) 27,760,412 shares of Class A Common Stock and (ii) Warrants (which are exercisable immediately) to purchase 8,309,659 shares of Class A Common Stock. FLC XXXIII is the general partner of MBO-VIII. Theodore J. Forstmann, Sandra J. Horbach, Thomas H. Lister, Winston W. Hutchins, Jamie C. Nicholls (each a United States citizen with his or her principal place of business being at the address set forth in response to Item 2(b) of this statement) and Gordon Holmes (a citizen of the Republic of Ireland with his principal place of business being at the address set forth in response to Item 2(b) of this statement), are the general partners of FLC XXXIII. The shares of Class A Common Stock owned by MBO-VIII represent approximately 21.1% of the Class A Common Stock outstanding, based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended, and there being 162,499,986 shares of Class A Common Stock outstanding as of April 16, 2002 as disclosed by McLeodUSA in its Disclosure Statement and confirmed by the Confirmation Order. (b) Assuming exercise by MBO-VIII in full of the Warrants purchased by it, the number of shares of Class A Common Stock as to which MBO-VIII has: (i) sole power to vote or to direct the vote - 36,070,071. (ii) shared power to vote or to direct the vote -- None. (iii) sole power to dispose or to direct the disposition of - 36,070,071. (iv) shared power to dispose or to direct the disposition of -- None. (v) Equity-VII: (a) Amount Beneficially Owned: Equity-VII directly owns (i) 46,267,352 shares of Class A Common Stock and (ii) Warrants (which are exercisable immediately) to purchase 13,849,432 shares of Class A Common Stock. FLC XXXII is the general partner of Equity-VII. Theodore J. Forstmann, Sandra J. Horbach, Thomas H. Lister, Winston W. Hutchins, Jamie C. Nicholls (each a United States citizen with his or her principal place of business being at the address set forth in response to Item 2(b) of this statement) and Gordon Holmes (a citizen of the Republic of Ireland with his principal place of business being at the address set forth in response to Item 2(b) of this statement), are the general partners of FLC XXXII. The shares of Class A Common Stock owned by Equity-VII represent approximately 34.1% of the Class A Common Stock outstanding, based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended, and there being 162,499,986 shares of Class A Common Stock outstanding as of April 16, 2002 as disclosed by McLeodUSA in its Disclosure Statement and confirmed by the Confirmation Order. (b) Assuming exercise by Equity-VII in full of the Warrants purchased by it, the number of shares of Class A Common Stock as to which Equity-VII has: (i) sole power to vote or to direct the vote - 60,116,784. (ii) shared power to vote or to direct the vote -- None. (iii) sole power to dispose or to direct the disposition of - 60,116,784. (iv) shared power to dispose or to direct the disposition of -- None. (vi) Theodore J. Forstmann: (a) Amount Beneficially Owned: Mr. Forstmann directly owns options to purchase shares of Class A Common Stock, of which 181,250 have vested and are presently exercisable for shares of Class A Common Stock at a price of $1.11 per share. The options directly owned by Mr. Forstmann are presently exercisable for less than 0.1% of the Class A Common Stock outstanding, based on calculations made in accordance with Rule 13d-3(d) of the Exchange Act and there being 162,499,986 shares of Class A Common Stock outstanding as of April 16, 2002 as disclosed by McLeodUSA in its Disclosure Statement and confirmed by the Confirmation Order. (b) Assuming exercise of the vested options, the number of shares as to which Mr. Forstmann has: (i) sole power to vote or to direct the vote - 181,250. (ii) shared power to vote or to direct the vote -- None. (iii) sole power to dispose or to direct the disposition of - 181,250. (iv) shared power to dispose or to direct the disposition of -- None. (vii) Thomas H. Lister: (a) Amount Beneficially Owned: Mr. Lister directly owns options to purchase shares of Class A Common Stock, of which 125,000 have vested and are presently exercisable for shares of Class A Common Stock at a price of $1.11 per share. The options directly owned by Mr. Lister are presently exercisable for less than 0.1% of the Class A Common Stock outstanding, based on calculations made in accordance with Rule 13d-3(d) of the Exchange Act and there being 162,499,986 shares of Class A Common Stock outstanding as of April 16, 2002 as disclosed by McLeodUSA in its Disclosure Statement and confirmed by the Confirmation Order. (b) Assuming exercise of the vested options, the number of shares as to which Mr. Lister has: (i) sole power to vote or to direct the vote - 125,000. (ii) shared power to vote or to direct the vote -- None. (iii) sole power to dispose or to direct the disposition of - 125,000. (iv) shared power to dispose or to direct the disposition of -- None. (viii) Except as set forth above and in Items 3 and 4, none of the Reporting Persons nor, to the knowledge of any of the Reporting Persons, any person identified in Schedule I, beneficially owns any shares of Class A Common Stock or has effected any transactions in shares of Class A Common Stock during the preceding 60 days. (ix) The right to receive dividends on, and proceeds from the sale of, the shares of Class A Common Stock beneficially owned by the Reporting Persons (other than Mr. Forstmann and Mr. Lister) is governed by the limited partnership agreements of each of such entities, and such dividends or proceeds may be distributed with respect to numerous general and limited partnership interests. ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer ------------------------------------------------------------- Item 6 is hereby amended to read as follows: The matters set forth above in Items 4 and 5 are incorporated in this Item 6 by reference. Except as set forth herein or incorporated herein by reference, none of the Reporting Persons, nor to the knowledge of any of the Reporting Persons, any person identified on Schedule I, has any contracts, arrangement, understandings or relationships (legal or otherwise) with any person with respect to any securities of McLeodUSA. ITEM 7. Material to be Filed as Exhibits -------------------------------- Item 7 is hereby amended as follows: 1. Stock Purchase Agreement, dated August 30, 1999, among McLeodUSA and the FL Partnerships.* 2. Registration Rights Agreement, dated as of September 15, 1999, among McLeodUSA and the FL Partnerships.* 3. Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series B Cumulative Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* 4. Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series C Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* 5. Joint Filing Agreement, dated September 22, 1999.* 6. Exchange Agreement, dated as of September 30, 2001, by and between McLeodUSA and the FL Partnerships.* 7. Termination Agreement, dated as of September 30, 2001, by and between McLeodUSA and the FL Partnerships.* 8. Registration Rights Agreement, dated as of September 30, 2001, by and between McLeodUSA and the FL Partnerships.* 9. Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series D Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* 10. Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series E Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* 11. Lock-Up, Support and Voting Agreement, dated as of December 3, 2001, by and among McLeodUSA and the FL Partnerships.* 12. Preferred Stock Purchase Agreement, dated as of December 3, 2001, by and between McLeodUSA and the 2001 FL Partnerships.* 13. Form of Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series F Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* 14. Form of Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series G Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* 15. Form of Common Stock Purchase Warrant.* 16. Joint Filing Agreement, dated December 6, 2001.* 17. Amended and Restated Lock-Up, Support and Voting Agreement, dated as of January 30, 2002, by and among McLeodUSA and the FL Partnerships.* 18. Amended and Restated Purchase Agreement, dated as of January 30, 2002, by and among McLeodUSA, the 2001 FL Partnerships and the FL Partnerships.* 19. Form of Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series B Convertible Preferred Stock and Qualifications, Limitations and Restrictions Thereof.* 20. Form of Common Stock Purchase Warrant.* 21. Second Amended and Restated Certificate of Incorporation of McLeodUSA. 22. Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Series B Preferred Stock and Qualifications, Limitations and Restrictions Thereof. 23. Warrant Agreement, dated as of April 12, 2002, between McLeodUSA and Wells Fargo Bank Minnesota, N.A. 24. Amendment, dated as of April 16, 2002, by and among McLeodUSA, the 2001 FL Partnerships and the FL Partnerships. 25. Termination Agreement, dated as of April 16, 2002, by and between McLeodUSA and the FL Partnerships. 26. Registration Rights Agreement, dated as of April 16, 2002, between McLeodUSA and the 2001 FL Partnerships. 27. Joint Filing Agreement, dated April 22, 2002. - -------- * Previously filed. SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: April 22, 2002 FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VI, L.P. By: FLC XXIX Partnership, L.P., its general partner By: /s/ Winston W. Hutchins --------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VII, L.P. By: FLC XXXIII Partnership, L.P., its general partner By: /s/ Winston W. Hutchins --------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V, L.P. By: FLC XXX Partnership, L.P., its general partner By: /s/ Winston W. Hutchins --------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VIII, L.P. By: FLC XXXIII Partnership, L.P., its general partner By: /s/ Winston W. Hutchins --------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-VII, L.P. By: FLC XXXII Partnership, L.P., its general partner By: /s/ Winston W. Hutchins --------------------------------- Winston W. Hutchins, a general partner /s/ Theodore J. Forstmann ----------------------------- Theodore J. Forstmann /s/ Thomas H. Lister ----------------------------- Thomas H. Lister Schedule I ---------- FLC XXIX Partnership, L.P.: General Partner of MBO-VI ------ FLC XXIX Partnership, L.P., a New York limited partnership ("FLC XXIX"), is the general partner of MBO-VI. Its purpose is to act as general partner of MBO-VI and other limited partnerships affiliated with MBO-VI. The address of the principal office of MBO-VI is c/o Forstmann Little & Co., 767 Fifth Avenue, New York, NY 10153. General Partners of FLC XXIX -------- The following are the general partners of FLC XXIX, the general partner of MBO-VI. All of the following are general partners of partnerships affiliated with Forstmann Little & Co., a private investment firm. The business address of each is 767 Fifth Avenue, New York, NY 10153 and each is a citizen of the United States, except for Gordon Holmes, who is a citizen of the Republic of Ireland. Theodore J. Forstmann Sandra J. Horbach Thomas H. Lister Winston W. Hutchins Jamie C. Nicholls Gordon Holmes FLC XXXIII Partnership, L.P.: General Partner of MBO-VII ------- FLC XXXIII Partnership, L.P., a New York limited partnership ("FLC XXXIII"), is the general partner of MBO-VII. Its purpose is to act as general partner of MBO-VII and other limited partnerships affiliated with MBO-VII. The address of the principal office of FLC XXXIII is c/o Forstmann Little & Co., 767 Fifth Avenue, New York, NY 10153. General Partners of FLC XXXIII ---------- The following are the general partners of FLC XXXIII, the general partner of MBO-VII. All of the following are general partners of partnerships affiliated with Forstmann Little & Co., a private investment firm. The business address of each of the following persons is 767 Fifth Avenue, New York, NY 10153 and each is a citizen of the United States, except for Gordon Holmes, who is a citizen of the Republic of Ireland. Theodore J. Forstmann Sandra J. Horbach Thomas H. Lister Winston W. Hutchins Jamie C. Nicholls Gordon Holmes FLC XXX Partnership, L.P.: General Partner of Equity-V -------- FLC XXX Partnership, L.P., a New York limited partnership ("FLC XXX"), is the general partner of Equity-V. Its purpose is to act as general partner of Equity-V and other limited partnerships affiliated with Equity-V. The address of the principal office of Equity-V is c/o Forstmann Little & Co., 767 Fifth Avenue, New York, NY 10153. General Partners of FLC XXX ------- The following are the general partners of FLC XXX, the general partner of Equity-V. All of the following are general partners of partnerships affiliated with Forstmann Little & Co., a private investment firm. The business address of each is 767 Fifth Avenue, New York, NY 10153 and each is a citizen of the United States. Theodore J. Forstmann Sandra J. Horbach Thomas H. Lister Winston W. Hutchins FLC XXXIII Partnership, L.P.: General Partner of MBO-VIII -------- FLC XXXIII, is the general partner of MBO-VIII. Its purpose is to act as general partner of MBO-VIII and other limited partnerships affiliated with MBO-VIII. The address of the principal office of FLC XXXIII is c/o Forstmann Little & Co., 767 Fifth Avenue, New York, NY 10153. General Partners of FLC XXXIII ---------- The following are the general partners of FLC XXXIII, the general partner of MBO-VIII. All of the following are general partners of partnerships affiliated with Forstmann Little & Co., a private investment firm. The business address of each of the following persons is 767 Fifth Avenue, New York, NY 10153 and each is a citizen of the United States, except for Gordon Holmes, who is a citizen of the Republic of Ireland. Theodore J. Forstmann Sandra J. Horbach Thomas H. Lister Winston W. Hutchins Jamie C. Nicholls Gordon Holmes FLC XXXII Partnership, L.P.: General Partner of Equity-VII ---------- FLC XXXII Partnership, L.P., a New York limited partnership ("FLC XXXII"), is the general partner of Equity-VII. Its purpose is to act as general partner of Equity-VII and other limited partnerships affiliated with Equity-VII. The address of the principal office of FLC XXXII is c/o Forstmann Little & Co., 767 Fifth Avenue, New York, NY 10153. General Partners of FLC XXXII --------- The following are the general partners of FLC XXXII, the general partner of Equity-VII. All of the following are general partners of partnerships affiliated with Forstmann Little & Co., a private investment firm. The business address of each of the following persons is 767 Fifth Avenue, New York, NY 10153 and each is a citizen of the United States, except for Gordon Holmes, who is a citizen of the Republic of Ireland. Theodore J. Forstmann Sandra J. Horbach Thomas H. Lister Winston W. Hutchins Jamie C. Nicholls Gordon Holmes EX-99.21 3 ex16.txt EXHIBIT 99.21 Exhibit 99.21 SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF McLEODUSA INCORPORATED McLeodUSA Incorporated, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), hereby certifies as follows: FIRST: The Corporation was originally incorporated under the name McLeod, Inc. on July 29, 1993 and its original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on the same date. The date of the filing of the Corporations's Amended and Restated Certificate of Incorporation was May 2, 1996. SECOND: This Second Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions previously filed with the Secretary of State of the State of Delaware on May 2, 1996, May 29, 1997, March 30, 2000 and June 13, 2000, is authorized by and is being filed in connection with the Corporation's Amended Plan of Reorganization, dated February 28, 2002 (as such plan may be amended from time to time, the "Plan of Reorganization") and was duly adopted pursuant to Sections 242, 245 and 303 of the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the "DGCL"). The Plan of Reorganization was confirmed by order entered on April 5, 2002, by the United States Bankruptcy Court for the District of Delaware. THIRD: The text of the Certificate of Incorporation of the Corporation hereby is amended and restated to read in its entirety as follows: ARTICLE 1. NAME The name of the Corporation is McLeodUSA Incorporated. ARTICLE 2. REGISTERED OFFICE AND AGENT The registered office of the Corporation shall be located at 1209 Orange Street, Wilmington, Delaware, 19801 in the County of New Castle. The registered agent of the Corporation at such address shall be The Corporation Trust Company. ARTICLE 3. PURPOSE AND POWERS The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL. The Corporation shall have all power necessary or convenient to the conduct, promotion or attainment of such acts and activities. ARTICLE 4. CAPITAL STOCK 4.1 AUTHORIZED SHARES The total number of shares of stock that the Corporation shall be authorized to issue is 2,050,000,000 shares as follows: (i) 1,886,249,986 shares of Class A common stock having a par value of $.01 per share ("Class A Common Stock"); (ii) 78,203,135 shares of Class B common stock having a par value of $.01 per share ("Class B Common Stock"); (iii) 35,546,879 shares of Class C common stock having a par value of $.01 per share ("Class C Common Stock" and, together with each other class of common stock of the Corporation, the "Common Stock"); and (iv) 50,000,000 shares of preferred stock having a par value of $.01 per share ("Preferred Stock"). 4.2 COMMON STOCK 4.2.1 RELATIVE RIGHTS The Common Stock shall be subject to all of the rights, privileges, preferences and priorities of the Preferred Stock, as set forth herein and in the certificate or certificates of designations filed to establish the respective series of Preferred Stock. Except as otherwise set forth in this Certificate of Incorporation, each share of Common Stock shall have the same relative rights as and be identical in all respects to all the other shares of Common Stock. 4.2.2 DIVIDENDS Whenever there shall have been paid, or declared and set aside for payment, to the holders of shares of any class of stock having preference over the Common Stock as to the payment of dividends, the full amount of dividends and of sinking fund or retirement payments, if any, to which such holders are respectively entitled in preference to the Common Stock, then dividends may be paid equally on each share of Class A Common Stock and any class or series of stock entitled to participate therewith as to dividends (including the Class B Common Stock and Class C Common Stock) in accordance with the terms of such class or series of stock, out of any assets legally available for the payment of dividends thereon, but only when and as declared by the Board of Directors of the Corporation. 4.2.3 DISSOLUTION, LIQUIDATION, WINDING UP In the event of any dissolution, liquidation, or winding up of the Corporation, whether voluntary or involuntary (a "liquidation"), the holders of Class A Common Stock and holders of any class or series of stock entitled to participate therewith (including the Class B Common Stock and Class C Common Stock), in whole or in part, as to the distribution of assets in such event, shall become entitled to participate in the distribution of any assets of the Corporation remaining after the Corporation shall have paid, or provided for payment of, all debts and liabilities of the Corporation and after the Corporation shall have paid, or set aside for payment, to the holders of any class of stock having preference over the Common Stock in the event of such liquidation the full preferential amounts (if any) to which they are entitled. 4.2.4 VOTING RIGHTS Each holder of shares of Common Stock shall be entitled to attend all special and annual meetings of the stockholders of the Corporation and, together with the holders of all other classes of stock entitled to attend and to vote at such meetings, to vote upon any matter or thing (including, without limitation, the election of one or more directors) properly considered and acted upon by the stockholders. Each holder of shares of Class A Common Stock shall be entitled to cast one vote for each outstanding share of Class A Common Stock so held. Each holder of shares of Class B Common Stock shall be entitled to cast that number of votes for each outstanding share of Class B Common Stock so held that is equal to (i) 56% of the aggregate number of votes which would be cast by the holders of the Class B Common Stock and the Class C Common Stock taken together if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote divided by (ii) the number of shares of Class B Common Stock then outstanding. Each holder of shares of Class C Common Stock shall be entitled to cast that number of votes for each outstanding share of Class C Common Stock so held that is equal to (x) 44% of the aggregate number of votes which would be cast by the holders of the Class B Common Stock and the Class C Common Stock taken together if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such vote divided by (y) the number of shares of Class C Common Stock then outstanding. 4.3 CLASS B COMMON STOCK AND CLASS C COMMON STOCK 4.3.1 DIVIDENDS (A) If at any time the Corporation shall declare and pay a dividend on the Class A Common Stock (other than dividends payable in shares of Class A Common Stock which, instead, shall be treated as set forth in Section 4.3.3(F)), then, at the same time, the Corporation shall declare and pay (a) a dividend on each share of Class B Common Stock equal to (i) 56% of the aggregate amount of dividends that would be paid to the holders of the Class B Common Stock and the Class C Common Stock taken together if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such dividend divided by (ii) the number of shares of Class B Common Stock then outstanding, and (b) a dividend on each share of Class C Common Stock equal to (i) 44% of the aggregate amount of dividends that would be paid to the holders of the Class B Common Stock and the Class C Common Stock taken together if such shares had been converted into Class A Common Stock immediately prior to the date established as the record date with respect to such dividend divided by (ii) the number of shares of Class C Common Stock then outstanding. (B) Except as provided in Section 4.3.1(A), no dividends shall be declared or paid on Class B Common Stock or Class C Common Stock. 4.3.2 DISSOLUTION, LIQUIDATION, WINDING UP In the event of any liquidation, the holders of the outstanding shares of Class B Common Stock and Class C Common Stock, taken together, shall be entitled to receive the aggregate amount that would be received by the holders of the outstanding shares of Class B Common Stock and Class C Common Stock if such shares had been converted into Class A Common Stock immediately prior to the liquidation (such amount, the "Aggregate Liquidation Amount"). Any proceeds distributed among the outstanding shares of Class B Common Stock and Class C Common Stock under the preceding sentence upon a liquidation shall be distributed (1) first, to the Class B Common Stock until it has received an amount equal to the aggregate Preference Amounts, as of the date of liquidation, of the outstanding Class B Common Stock, (2) second, 37.5% to the Class B Common Stock and 62.5% to the Class C Common Stock until the Class B Common Stock has received an amount equal to the Outstanding Class B Capital Amount as of the date of liquidation (in addition to any amount received pursuant to clause (1) of this sentence) and the Class C Common Stock has received an amount equal to the Outstanding Class C Capital Amount as of the date of liquidation, and (3) thereafter 56% to the Class B Common Stock and 44% to the Class C Common Stock. Notwithstanding the foregoing, in no event shall the Class B Common Stock receive more than 97% of the Aggregate Liquidation Amount or the Class C Common Stock receive less than 3% of the Aggregate Liquidation Amount. Any amounts distributed with respect to the Class B Common Stock pursuant to this Section 4.3.2 shall be allocated pro rata among the shares of Class B Common Stock and any amounts distributed with respect to the Class C Common Stock pursuant to this Section 4.3.2 shall be allocated pro rata among the shares of Class C Common Stock. For the purposes of this Section 4.3.2, neither the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Corporation nor the consolidation or merger of the Corporation with or into one or more other entities shall be deemed to be a liquidation. 4.3.3 CONVERSION (A) (i) Subject to the provisions of this Section 4.3.3, the holders of shares of Class B Common Stock shall have the right, at any time in whole and from time to time in part, at such holders' option, to convert any or all outstanding shares of Class B Common Stock held by such holders into fully paid and non-assessable shares of Class A Common Stock ("Conversion"). Upon any Conversion, a proportional amount, based on the percentage of each class of shares outstanding, of the Class C Common Stock shall automatically convert in accordance with the terms of the Class C Common Stock set forth herein. (ii) The outstanding shares of Class B Common Stock and Class C Common Stock, taken together, shall be convertible into a number of shares of Class A Common Stock (the "Aggregate Conversion Shares") equal to 113,750,014 minus the cumulative number of shares of Class A Common Stock into which the Class B Common Stock and Class C Common Stock shall have been converted at any time prior to such Conversion, adjusted, as appropriate, to reflect any event set forth in Section 4.3.3(F)(i). The Class B Common Stock shall be convertible into a number of shares of Class A Common Stock (the "Aggregate Class B Conversion Shares") equal to the lesser of (A) 97% of the Aggregate Conversion Shares and (B) the sum of (1) the aggregate Preference Amounts, as of the date of conversion, of the outstanding shares of Class B Common Stock divided by the Net Realizable FMV of a share of Class A Common Stock as of the date of conversion, plus (2) the Class B Capital Share Number, plus (3) the product of (x) .560 and (y) the excess, if any, of the Aggregate Conversion Shares over the sum of (i) the number determined pursuant to clause (1), (ii) the Class B Capital Share Number and (iii) the Class C Capital Share Number (such excess, the "Conversion Excess"). Each share of Class B Common Stock being converted shall convert into a number of shares of Class A Common Stock equal to the Aggregate Class B Conversion Shares divided by the number of shares of Class B Common Stock outstanding as of the date of conversion. The Class C Common Stock shall be convertible into a number of shares of Class A Common Stock (the "Aggregate Class C Conversion Shares") equal to the greater of (A) 3% of the Aggregate Conversion Shares and (B) the sum of (I) the Class C Capital Share Number, plus (II) the product of (x) .440 and (y) the Conversion Excess. Each share of Class C Common Stock being converted shall convert into a number of shares of Class A Common Stock equal to the Aggregate Class C Conversion Shares divided by the number of shares of Class C Common Stock outstanding as of the date of conversion. (iii) In the case of any partial conversion of Class B Common Stock by the holders thereof, selection of the Class C Common Stock for automatic conversion will be made by the Corporation in compliance with the requirements of the principal national securities exchange, if any, on which the Class C Common Stock is listed, or if the Class C Common Stock is not listed on a national securities exchange, on a pro rata basis, by lot or such other method as the Corporation, in its sole discretion, shall deem fair and appropriate. (B) (i) In order to effect a Conversion, the holder of the shares of Class B Common Stock or Class C Common Stock, as applicable, to be converted shall surrender the certificate representing such shares at the principal executive offices of the Corporation, with a written notice of election to convert completed and signed, specifying the number of shares to be converted. (ii) Unless the shares issuable on a Conversion are to be issued in the same name as the name in which such shares of Class B Common Stock or Class C Common Stock, as applicable, are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or the holder's duly authorized attorney, and an amount sufficient to pay any transfer or similar tax. (iii) As promptly as practicable after the surrender by the holder of the certificates for shares of Class B Common Stock or Class C Common Stock, as applicable, as aforesaid, the Corporation shall issue and shall deliver to such holder, or on the holder's written order to the holder's transferee, (x) a certificate or certificates for the whole number of shares of Class A Common Stock issuable upon the conversion of such shares in accordance with the provisions of this Section 4.3.3, (y) any cash adjustment required pursuant to Section 4.3.3(E), and (z) in the event of a conversion in part, a certificate or certificates for the whole number of shares of Class B Common Stock or Class C Common Stock, as applicable, not being so converted. (iv) Each conversion of shares of Class B Common Stock or Class C Common Stock, as applicable, pursuant to Section 4.3.3(A) shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for such shares shall have been surrendered and such notice received by the Corporation as aforesaid, and the person in whose name or names any certificate or certificates for shares of Class A Common Stock shall be issuable upon any such conversion shall be deemed to have become the holder of record of the shares of Class A Common Stock represented thereby at such time on such date, and such conversion shall be into a number of whole shares of Class A Common Stock in respect of the shares of Class B Common Stock or Class C Common Stock, as applicable, being converted as determined in accordance with this Section 4.3.3 at such time on such date. All shares of Class A Common Stock delivered upon conversion of the Class B Common Stock or Class C Common Stock, as applicable, will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights. Upon the surrender of certificates representing the shares of Class B Common Stock or Class C Common Stock, as applicable, to be converted, the shares to be so converted shall no longer be deemed to be outstanding and all rights of a holder with respect to such shares surrendered for conversion shall immediately terminate except the right to receive the Class A Common Stock and other amounts payable pursuant to this Section 4.3.3 and a certificate or certificates representing the shares of Class B Common Stock or Class C Common Stock, as applicable, not converted. (C) (i) The Corporation will at all times reserve and keep available, free from preemptive rights, such number of its authorized but unissued shares of Class A Common Stock as shall be required for the purpose of effecting conversions of the Class B Common Stock and the Class C Common Stock. (ii) Prior to the delivery of any securities which the Corporation shall be obligated to deliver upon conversion of the Class B Common Stock and the Class C Common Stock, the Corporation shall comply with all applicable federal and state laws and regulations which require action to be taken by the Corporation. (D) The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Class A Common Stock on conversion of the Class B Common Stock and the Class C Common Stock pursuant hereto; provided that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of shares of Class A Common Stock in a name other than that of the holder of the shares to be converted and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid. (E) In connection with the conversion of any shares of Class B Common Stock or Class C Common Stock, as applicable, no fractions of shares of Class A Common Stock shall be required to be issued to the holder of such shares, but in lieu thereof the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Market Price per share of Class A Common Stock on the business day next preceding the date of conversion. (F) (i) In case the Corporation shall at any time (A) declare a dividend or make a distribution on the Class A Common Stock payable in Class A Common Stock, (B) subdivide or split the outstanding Class A Common Stock, (C) combine or reclassify the outstanding Class A Common Stock into a smaller number of shares, (D) issue any shares of its capital stock in a reclassification of the Class A Common Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing corporation), or (E) consolidate with, or merge with or into, any other person, appropriate adjustment shall be made so that the conversion of the Class B Common Stock and the Class C Common Stock after such time shall entitle the holders of the Class B Common Stock and the Class C Common Stock, in the aggregate, to receive the aggregate number of shares of Class A Common Stock or other securities of the Corporation (or other securities into which such shares of Class A Common Stock have been converted, exchanged, combined, consolidated, merged or reclassified pursuant to clause (C), (D) or (E) of this Section 4.3.3(F)(i)) which, if the Class B Common Stock and Class C Common Stock had been converted immediately prior to such time, the holders of Class B Common Stock and the Class C Common Stock, in the aggregate, would have owned upon such conversion and been entitled to receive by virtue of such dividend, distribution, subdivision, split, combination, consolidation, merger or reclassification. Such adjustment shall be made successively whenever an event listed in this Section 4.3.3(F)(i) shall occur. Reference to time in this Section 4.3.3(F)(i) shall include a reference to any record date set for purposes of determining the holders entitled to participate in any of the events listed in this Section 4.3.3(F)(i). (ii) In the event that, at any time as a result of the provisions of Section 4.3.3(F), a holder of Class B Common Stock or Class C Common Stock, as applicable, upon subsequent conversion shall become entitled to receive any shares of capital stock of the Corporation other than Class A Common Stock, the number of such other shares so receivable upon conversion of Class B Common Stock or Class C Common Stock, as applicable, shall thereafter be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions contained herein. (G) All adjustments pursuant to this Section 4.3.3 shall be notified to the holders of the Class B Common Stock and Class C Common Stock and such notice shall be accompanied by a schedule of computations of the adjustments. 4.3.4 SHARES OF CLASS B AND CLASS C COMMON STOCK (A) Shares of Class B Common Stock or Class C Common Stock that are converted into shares of Class A Common Stock as provided in Section 4.3.3 shall be retired and canceled and shall have the status of authorized but unissued shares of Class B Common Stock or Class C Common Stock, respectively. (B) The Corporation will not be entitled to issue additional shares of Class B Common Stock or Class C Common Stock, or issue options, rights or warrants to subscribe for additional shares of, or other securities convertible, exchangeable or exercisable into, Class B Common Stock or Class C Common Stock. (C) Notwithstanding anything to the contrary contained in this Certificate of Incorporation, in no event will the holders of the Class B Common Stock and the Class C Common Stock, in the aggregate, with respect to such stock, be entitled to voting rights (except as otherwise required by law or as expressly provided in Section 4.3.4(E)), dividend rights, or rights upon liquidation in excess of, or that are less than, the rights to which such holders, in the aggregate, would have been entitled if the Class B Common Stock and Class C Common Stock had been converted into Class A Common Stock pursuant to Section 4.3.3. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, except pursuant to Section 4.3.3(F), in no event will the Class B Common Stock and Class C Common Stock be convertible, in the aggregate, into more than 113,750,014 shares of Class A Common Stock. (D) In addition to any vote required by law or this Certificate of Incorporation, any amendment to this Certificate of Incorporation that changes the aggregate number of shares of Class A Common Stock into which the Class B Common Stock and Class C Common Stock are convertible (other than in connection with an amendment to the Certificate of Incorporation which involves a pro rata increase or decrease, as the case may be, in the Class A Common Stock through a stock split, merger or otherwise) shall require the affirmative vote of 75% of the outstanding shares of Class A Common Stock entitled to vote thereon, voting separately as a class, and the affirmative vote of a majority of the members of the entire Board of Directors. (E) No consent of any class of capital stock of the Corporation other than the consent of a majority of the outstanding shares of Class B Common Stock and the majority of the outstanding shares of Class C Common Stock, each voting separately as a class, shall be required to amend any provision of this Section 4.3, the sole effect of which is to change the allocations of voting rights, dividends or liquidation distributions as between the Class B Common Stock and the Class C Common Stock, or the relative number of shares of Class A Common Stock into which the Class B Common Stock and Class C Common Stock are convertible, so long as such amendment does not change the aggregate voting rights of the Class B Common Stock and Class C Common Stock, the aggregate amount of dividends or liquidation distributions payable to the Class B Common Stock and the Class C Common Stock, or the aggregate number of shares of Class A Common Stock into which the Class B Common Stock and Class C Common Stock are convertible. (F) In the event of a merger or consolidation of the Corporation with or into another entity (whether or not the Corporation is the surviving entity) at a time at which any shares of Class B Common Stock or Class C Common Stock are outstanding, (1) the amount of consideration payable in respect of each share of Class A Common Stock shall be equal to (i) the aggregate amount of consideration payable in respect of the Class B Common Stock and Class C Common Stock in such merger or consolidation divided by (ii) the aggregate number of shares of Class B Common Stock and Class C Common Stock then outstanding and (2) the type of consideration payable in respect of each share of Class A Common Stock shall be the same type of consideration payable in respect of each share of Class B Common Stock and Class C Common Stock; provided that in any such transaction in which the holders of Common Stock are to receive shares of capital stock, the terms of the shares to be received by holders of Class B Common Stock and Class C Common Stock may differ from the terms of the shares to be received by the holders of Class A Common Stock to the extent that the terms of the Class B Common Stock and Class C Common Stock differ from the terms of the Class A Common Stock under this Certificate of Incorporation, as in effect immediately prior to such transaction. (G) In addition to any vote required by law or this Certificate of Incorporation, any amendment or repeal of Section 4.3.1(B) or Section 4.3.4 of this Certification of Incorporation shall require the affirmative vote of 75% of the outstanding shares of Class A Common Stock entitled to vote thereon, voting separately as a class, and the affirmative vote of a majority of the members of the entire Board of Directors. 4.3.5 DEFINITIONS For purposes of this Section 4.3, the following terms shall have the meanings indicated: "Class B Capital Share Number" means the lesser of (x) .375 times the excess, if any, of the Aggregate Conversion Shares over the number determined pursuant to clause (B)(1) of Section 4.3.3(A)(ii), and (y) the number obtained by dividing (i) the Outstanding Class B Capital Amount as of the date of conversion by (ii) the Net Realizable FMV of a share of Class A Common Stock as of the date of conversion. "Class C Capital Share Number" means the lesser of (x) .625 times the excess, if any, of the Aggregate Conversion Shares over the number determined pursuant to clause (B)(1) of Section 4.3.3(A)(ii), and (y) the number obtained by dividing (i) the Outstanding Class C Capital Amount as of the date of conversion by (ii) the Net Realizable FMV of a share of Class A Common Stock as of the date of conversion. "Current Market Price" means the average of the daily Market Prices of the Class A Common Stock for ten consecutive trading days immediately preceding the date for which such value is to be computed. "Market Price" means, with respect to the Class A Common Stock, on any given day, (i) the price of the last trade, as reported on the Nasdaq National Market, not identified as having been reported late to such system, or (ii) if the Class A Common Stock is so traded, but not so quoted, the average of the last bid and ask prices, as those prices are reported on the Nasdaq National Market, or (iii) if the Class A Common Stock is not listed or authorized for trading on the Nasdaq National Market or any comparable system, the average of the closing bid and asked prices as furnished by two members of the National Association of Securities Dealers, Inc. selected from time to time by the Corporation for that purpose. If the Class A Common Stock is not listed and traded in a manner that the quotations referred to above are available for the period required hereunder, the Market Price per share of Class A Common Stock shall be deemed to be the fair value per share of such security as determined in good faith by the Board of Directors of the Corporation. "Net Realizable FMV" means, with respect to a share of Class A Common Stock, if calculable, the amount of gross proceeds net of underwriters' discounts, commissions or other selling expenses received by or to be received by the holder in connection with the sale of such share of Class A Common Stock on a when issued basis or immediately after the conversion or, in all other cases, an amount equal to 97% of the Current Market Price of the Class A Common Stock. "Outstanding Class B Capital Amount" means the product of (x) 193,125,000 and (y) a fraction, the numerator of which is the number of outstanding shares of Class B Common Stock as of the date of liquidation or conversion, as the case may be, and the denominator of which is the number of shares of Class B Common Stock issued on the original date of issuance of the Class B Common Stock, adjusted, as appropriate, to reflect any event set forth in Section 4.3.3(F)(i). "Outstanding Class C Capital Amount" means the product of (x) 321,875,000 and (y) a fraction, the numerator of which is the number of outstanding shares of Class C Common Stock as of the date of liquidation or conversion, as the case may be, and the denominator of which is the number of shares of Class C Common Stock issued on the original date of issuance of the Class C Common Stock, adjusted, as appropriate, to reflect any event set forth in Section 4.3.3(F)(i). "Preference Amounts" with respect to a share of Class B Common Stock means, as at any date, the sum of (i) $6.394 plus (ii) the Special Amount, adjusted, as appropriate, to reflect any event set forth in Section 4.3.3(F)(i). "Special Amount" with respect to a share of Class B Common Stock shall mean, as at any date, an amount equal to (a) $0.10 plus (b) a fraction, the numerator of which is equal to the product of (i) $6.394, (ii) .07 and (iii) the number of months (and the fraction of a month, based on a 30 day month, calculated to three decimal places) that have lapsed since September 30, 2001 to such date, and the denominator of which is equal to 12, adjusted, as appropriate, to reflect any event set forth in Section 4.3.3(F)(i). 4.4 PREFERRED STOCK The Board of Directors is expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such distinctive designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series and as may be permitted by the DGCL, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions. 4.5 REDEMPTION Notwithstanding any other provision of this Certificate of Incorporation to the contrary, outstanding shares of stock of the Corporation shall always be subject to redemption by the Corporation, by action of the Board of Directors, if in the judgment of the Board of Directors such action should be taken, pursuant to Section 151(b) of the DGCL or any other applicable provision of law, to the extent necessary to prevent the loss or secure the reinstatement of any license or franchise from any governmental agency held by the Corporation or any of its subsidiaries to conduct any portion of the business of the Corporation or any of its subsidiaries, which license or franchise is conditioned upon some or all of the holders of the Corporation's stock possessing prescribed qualifications. The terms and conditions of such redemption shall be as follows: (A) The redemption price of the shares to be redeemed pursuant to this Section 4.5 shall be determined by the Board of Directors and shall be equal to the Fair Market Value (as defined herein) of such shares or, if such shares were purchased by a Disqualified Holder (as defined herein) within one year of the Redemption Date (as defined herein), the lesser of (i) the Fair Market Value of such shares and (ii) the purchase price paid by such Disqualified Holder for such shares; (B) At the election of the Corporation, the redemption price of such shares may be paid in cash, Redemption Securities (as defined herein) or any combination thereof; (C) If fewer than all shares held by Disqualified Holders are to be redeemed, the shares to be redeemed shall be selected in such manner as shall be determined by the Board of Directors, which may include selection first of the most recently purchased shares thereof, selection by lot or selection in any other manner determined by the Board of Directors; (D) At least 30 days' prior written notice of the Redemption Date shall be given to any Disqualified Holder of shares selected to be redeemed (unless waived in writing by any such holder), provided that the Redemption Date may be the date on which written notice shall be given to such holder if the cash or Redemption Securities necessary to effect the redemption shall have been deposited in trust for the benefit of such holder and subject to immediate withdrawal by it upon surrender of the stock certificates for the shares to be redeemed; (E) From and after the Redemption Date, any and all rights of whatever nature that any Disqualified Holder may have with respect to any shares selected for redemption (including without limitation any rights to vote or participate in dividends declared on stock of the same class or series as such shares) shall cease and terminate, and such Disqualified Holder shall thenceforth be entitled only to receive, with respect to such shares, the cash or Redemption Securities payable upon redemption; and (F) Such additional terms and conditions as the Board of Directors shall determine. For purposes of this Section 4.5, the following terms shall have the meanings indicated: "Disqualified Holder" shall mean any holder of shares of stock of the Corporation whose holding of such stock, either individually or when taken together with the holding of shares of stock of the Corporation by any other holders, may result, in the judgment of the Board of Directors, in the loss of, or the failure to secure the reinstatement of, any license or franchise from any governmental agency held by the Corporation or any of its subsidiaries to conduct any portion of the business of the Corporation or any of its subsidiaries. "Fair Market Value" of a share of the Corporation's stock of any class or series shall mean the average Closing Price (as defined herein) for such a share for each of the 45 most recent days on which shares of stock of such class or series shall have been traded preceding the day on which notice of redemption shall be given pursuant to paragraph (D) of this Section 4.5; provided, however, that if shares of stock of such class or series are not traded on any securities exchange or in the over-the-counter market, "Fair Market Value" shall be determined by the Board of Directors in good faith. "Closing Price" on any day means the reported closing sales price or, in case no such sale takes place, the average of the reported closing bid and asked prices on the principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended, on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing sales price or bid quotation for such stock on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such prices or quotations are available, the fair market value on the day in question as determined by the Board of Directors in good faith. "Redemption Date" shall mean the date fixed by the Board of Directors for the redemption of any shares of stock of the Corporation pursuant to this Section 4.5. "Redemption Securities" shall mean any debt or equity securities of the Corporation, any of its subsidiaries or any other corporations, or any combination thereof, having such terms and conditions as shall be approved by the Board of Directors and which, together with any cash to be paid as part of the redemption price, in the opinion of any investment banking firm selected by the Board of Directors (which may be a firm which provides other investment banking, brokerage or other services to the Corporation), has a value, at the time notice of redemption is given pursuant to paragraph (D) of this Section 4.5, at least equal to the price required to be paid pursuant to paragraph (A) of this Section 4.5 (assuming for purposes of such valuation, in the case of Redemption Securities to be publicly traded, such Redemption Securities were fully distributed and trading under normal conditions). ARTICLE 5. BOARD OF DIRECTORS 5.1 DIRECTORS; NUMBER; ELECTION The number of directors of the Corporation shall be such number as from time to time shall be fixed by, or in the manner provided in, the Bylaws of the Corporation. Unless and except to the extent that the Bylaws of the Corporation shall otherwise require, the election of directors of the Corporation need not be by written ballot. Each director of the Corporation shall be entitled to one vote per director on all matters voted or acted upon by the Board of Directors. The Board of Directors shall be divided into three classes (designated as Class I, Class II, and Class III), as nearly equal in number as possible. At each annual meeting of stockholders, the successors to the class of directors whose term shall then expire shall be elected to hold office for a term expiring at the third succeeding annual meeting and until their successors shall be elected and qualified. Except as set forth below with respect to vacancies and newly created directorships, directors shall be elected by a plurality of the voting rights represented by the shares present in person or represented by proxy at the meeting and entitled to vote on the election of such directors. If the number of directors is changed by resolution of the Board of Directors pursuant to this Article 5, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease in the number of directors shorten the term of an incumbent director. Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the holders of Common Stock and any other stockholders having the right to vote with the Common Stock as a single class may be filled by a majority of the directors then in office, although fewer than a quorum, or by a sole remaining director, and each director so chosen shall hold office until the next election of the class of directors for which such director is chosen, and until such director's successor is elected and qualified, or until the director's earlier death, resignation or removal. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of this Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may (unless otherwise provided in this Certificate of Incorporation) be filled by a majority of the directors elected by such class or classes or series thereof in office, or by a sole remaining director so elected, and each director so chosen shall hold office until the next election of the class of directors for which such director is chosen, and until such director's successor is elected and qualified, or until the director's earlier death, resignation or removal. 5.2 MANAGEMENT OF BUSINESS AND AFFAIRS OF THE CORPORATION The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. 5.3 LIMITATION OF LIABILITY No director of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the director's duty of loyalty to the Corporation or its stockholders; (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (c) under Section 174 of the DGCL; or (d) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this Section 5.3 shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification. ARTICLE 6. INDEMNIFICATION The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article 6 shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition. The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article 6 to directors and officers of the Corporation. The rights to indemnification and to the advance of expenses conferred in this Article 6 shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation, the By-Laws of the Corporation, any statute, agreement, vote of stockholders or disinterested directors or otherwise. Any repeal or modification of this Article 6 by the stockholders of the Corporation shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification. ARTICLE 7. AMENDMENT OF CERTIFICATE OF INCORPORATION The Corporation reserves the right, at any time and from time to time, to amend or repeal any provision contained in this Certificate of Incorporation, and other provisions authorized by the laws for the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law, except that Sections 5.1 and 5.3, Article 6, this Article 7 and Article 9 may not be amended or repealed except by the affirmative vote of at least two-thirds of the voting rights represented by the shares entitled to vote thereon and the affirmative vote of a majority of the members of the entire Board of Directors; and all rights, preferences, and privileges of any nature conferred upon stockholders, directors, or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this Article 7. ARTICLE 8. AMENDMENT OF BYLAWS In furtherance and not in limitation of the powers conferred by the DGCL, the Board of Directors of the Corporation is expressly authorized and empowered to adopt, amend and repeal the Bylaws of the Corporation. ARTICLE 9. UNANIMOUS WRITTEN CONSENT TO STOCKHOLDER ACTION WITHOUT A MEETING. Notwithstanding the provisions of Section 228 of the DGCL, except to the extent otherwise provided pursuant to the terms of any series of Preferred Stock with respect to such series, no corporate action of stockholders without a meeting of stockholders shall be taken by less than unanimous written consent of the stockholders of the Corporation entitled to vote thereon. ARTICLE 10. SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW The Corporation elects not to be governed by Section 203 of the DGCL, as the same may be amended from time to time. This election shall be effective as of the earliest date permitted by law. ARTICLE 11. ADDITIONAL PROVISIONS The Corporation will not issue non-voting equity securities to the extent prohibited by Section 1123(a)(6) of the United States Bankruptcy Code (the "Bankruptcy Code") as in effect on the effective date of the Plan of Reorganization; provided, however, that this Article 11: (a) will have no further force and effect beyond that required under Section 1123 of the Bankruptcy Code; (b) will have such force and effect, if any, only for so long as such Section is in effect and applicable to the Corporation; and (c) in all events may be amended or eliminated in accordance with applicable law as from time to time in effect. IN WITNESS WHEREOF, McLeodUSA Incorporated has caused this Second Amended and Restated Certificate of Incorporation to be signed and attested by its duly authorized officers this 12th day of April, 2002. McLeodUSA Incorporated By: /s/ Stephen C. Gray ---------------------------------- Name: Stephen C. Gray Title: President and Chief Executive Officer EX-99.22 4 ex17.txt EXHIBIT 99.22 Exhibit 99.22 MCLEODUSA INCORPORATED CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF SERIES B PREFERRED STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF -------------------------------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware -------------------------------------------------------------- McLeodUSA Incorporated (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that, pursuant to authority conferred upon the board of directors of the Corporation (the "Board of Directors") by the Corporations's Second Amended and Restated Certificate of Incorporation, as amended (the "Restated Certificate of Incorporation"), and pursuant to Section 151 of the General Corporation Law of the State of Delaware, said Board of Directors is authorized to issue Preferred Stock of the Corporation in one or more series, and the Board of Directors has approved and adopted the following in connection with the Corporation's Amended Plan of Reorganization, dated February 28, 2002, as such plan may be amended or modified from time to time. The Plan of Reorganization was confirmed by order entered on April 5, 2002, by the United States Bankruptcy Court for the District of Delaware: RESOLVED that, the Board of Directors hereby creates, authorizes and provides for the issuance of a series of the preferred stock of the Corporation, par value $.01 per share, designated as the "Series B Preferred Stock," consisting of 10 shares and having the powers, designation, preferences and relative, participating, optional and other special rights and the qualifications, limitations and restrictions thereof that are set forth in the Restated Certificate of Incorporation and herein as follows: 1. Number and Designation. 10 shares of the Preferred Stock of the Corporation shall constitute a series designated as "Series B Preferred Stock" (the "Series B Preferred Stock"). 2. Definitions. Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated. "Board of Directors" means the Board of Directors of the Corporation. "Change of Control" shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than the Initial Holders or their affiliates, a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Corporation representing 50% or more of the total voting power represented by the Corporation's then outstanding Voting Securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation and any new director whose election by the Board of Directors or nomination for election by the Corporation's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of (in one transaction or a series of transactions) all or substantially all the Corporation's assets, and such merger, consolidation, liquidation, sale or disposition is consummated. "Class A Common Stock" means any shares of the Corporation's Class A common stock, par value $.01 per share, now or hereafter authorized to be issued, any and all securities of any kind whatsoever of the Corporation which may be exchanged for or converted into Class A Common Stock, and any and all securities of any kind whatsoever of the Corporation which may be issued on or after the date hereof in respect of, in exchange for, or upon conversion of shares of Class A Common Stock pursuant to a merger, consolidation, stock split, stock dividend, recapitalization of the Corporation or otherwise. "Common Stock" means the Corporation's Class A Common Stock, and any other common stock of the Corporation. "Initial Holders" means the recipients of the original issuance of the Series B Preferred Stock on the Issue Date as shown in the stock record book of the Corporation. "Issue Date" means the original date of issuance of shares of Series B Preferred Stock. "Voting Securities" means any securities of the Corporation which vote generally in the election of directors. 3. Voting Rights. (a) The Initial Holders shall not be entitled to any voting rights except as hereinafter provided in this Section 3 or as otherwise provided by law. (b) From and after the Issue Date, the Initial Holders shall be entitled to designate two directors (the "Two Designees," who shall be designated specifically as the "First Designee" and the "Second Designee," respectively) for election to the Board of Directors of the Corporation and, voting separately as a series, shall have the exclusive right to vote for the election of such designees to the Board of Directors; provided that, notwithstanding the foregoing, (A) the Initial Holders shall continue to be entitled to designate two directors for election to the Board of Directors and, voting separately as a series, shall continue to have the exclusive right to vote for the election of such designees to the Board of Directors, for as long as, and only for as long as, the Initial Holders beneficially own at least 40% of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date; (B) the entitlement of the Initial Holders to designate two directors for election to the Board of Directors, and the exclusive right of the Initial Holders to vote, separately as a series, for the election of such designees to the Board of Directors, shall cease immediately upon the Initial Holders beneficially owning less than 40% of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date, and the Initial Holders shall be entitled to designate one director (the "Single Designee") for election to the Board of Directors and, voting separately as a series, shall have the exclusive right to vote for the election of such designee to the Board of Directors, and to designate one Board Observer (as hereinafter defined), for as long as, and only for so long as, the Initial Holders beneficially own less than 40% but more than 20% of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date; (C) the entitlement of the Initial Holders to designate one director for election to the Board of Directors, and the exclusive right of the Initial Holders to vote, separately as a series, for the election of such designee to the Board of Directors, and the exclusive right of the Initial Holders to designate one Board Observer, and the rights of such Board Observer, shall cease immediately upon the Initial Holders beneficially owning 20% or less of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date, and the Initial Holders shall be entitled to designate two Board Observers for as long as, and only for as long as, the Initial Holders beneficially own 20% or less but at least 10% of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date; (D) immediately upon the Initial Holders beneficially owning less than 10% of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date, the entitlement of the Initial Holders to designate two Board Observers, and the rights of such Board Observers, shall cease; (E) immediately upon the Initial Holders beneficially owning less than 40% but more than 20% of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date, the Board of Directors shall cause the total number of directors then constituting the whole Board of Directors to be decreased by one, and the term of office of the applicable designee shall terminate; and (F) immediately upon the Initial Holders beneficially owning 20% or less of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date, the Board of Directors shall cause the total number of directors then constituting the whole Board of Directors to be decreased by one, and the term of office of the Single Designee shall terminate. The First Designee, the Second Designee and, if applicable, the Single Designee shall serve in Class III of the Board of Directors. Any or all of the Two Designees and the Single Designee may be removed with or without cause by the Initial Holders, who shall have the exclusive right to fill the vacancy created thereby. "Board Observer" means a person who shall not be a member of the Board of Directors and who shall have the rights as agreed to with the Corporation. For purposes of this Certificate of Designation, the Initial Holders shall not be deemed to beneficially own the shares of Common Stock underlying any unexercised warrants to purchase shares of Common Stock. (c) Without the written consent of the Initial Holders, the Corporation will not amend, alter or repeal any provision of the Restated Certificate of Incorporation or this Certificate of Designation so as to adversely affect the preferences, rights or powers of the Series B Preferred Stock or to authorize the issuance of, or to issue any, additional shares of Series B Preferred Stock. (d) Each share of Series B Preferred Stock shall vote with Common Stock on all matters submitted to a vote of stockholders of the Corporation. Except as otherwise provided herein or by law, the holders of Series B Preferred Stock and the holders of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (e) In exercising the voting rights set forth in this Section 3, each share of Series B Preferred Stock shall have one vote per share. The exercise of any voting rights set forth in this Section 3 may be by written consent in lieu of a meeting. 4. Cancellation. All then outstanding shares of Series B Preferred Stock shall be deemed to be and shall be cancelled in full and shall no longer be issued or outstanding and shall no longer constitute an obligation of the Corporation in any way upon the occurrence of the earlier of (a) the Initial Holders beneficially owning less than 10% of the shares of Common Stock beneficially owned by the Initial Holders on the Issue Date or (b) upon a Change of Control. 5. Liquidation Preference. Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, each holder of Series B Preferred Stock shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders, an amount equal to $1.00 per share for each share of Series B Preferred Stock held by such holder before any distribution is made on any Common Stock. The rights of the Series B Preferred Stock upon liquidation, dissolution or winding-up of the Corporation shall be junior to each class of preferred stock of the Corporation whether outstanding on the Issue Date or issued after the Issue Date. 6. Other Rights and Powers. Except as set forth herein, the shares of Series B Preferred Stock shall not have any relative, participating, optional or other special rights (including, without limitation, any rights to convert into Common Stock or any rights to dividends) and powers and the consent of the holders thereof shall not be required for the taking of any corporate action. Without limiting the foregoing, the increase or decrease in the amount of authorized shares of any class of capital stock of the Corporation, including preferred stock (other than the Series B Preferred Stock), shall not require the consent of holders of Series B Preferred Stock. 7. Restrictions on Transfer. Notwithstanding anything to the contrary contained herein or in the Restated Certificate of Incorporation, any share(s) of Series B Preferred Stock not beneficially owned by the Initial Holders shall, immediately upon the occurrence of the event which effected the transfer or other disposition of such share(s), be deemed to be and shall be cancelled in full and shall no longer be issued or outstanding and shall no longer constitute an obligation of the Corporation in any way. 8. General Provisions. (a) The term "person" as used herein means any corporation, limited liability company, partnership, trust, organization, association, other entity or individual. (b) The headings of the sections, paragraphs, subparagraphs, clauses and subclauses of this Certificate of Designation are for convenience of reference only and shall not define, limit or affect any of the provisions hereof. IN WITNESS WHEREOF, said McLeodUSA Incorporated has caused this Certificate of Designations to be signed this 12th day of April, 2002. McLEODUSA INCORPORATED By: /s/ Stephen C. Gray ------------------------- Name: Stephen C. Gray Title: President and Chief Executive Officer EX-99.23 5 ex18.txt EXHIBIT 99.23 Exhibit 99.23 WARRANT AGREEMENT, dated as of April 12, 2002, between McLeodUSA Incorporated, a Delaware corporation (the "Company"), and Wells 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. Paul, 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 bill 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 6400 C Street SW, Cedar Rapids, Iowa 52404. 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: Wells Fargo Bank Minnesota, N.A. 161 North Concord Exchange South St. Paul, MN 55075 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/ Randall Rings ------------------------------ Name: Randall Rings Title: Group Vice President and Chief Legal Officer WELLS FARGO BANK MINNESOTA, N.A., As Warrant Agent By: /s/ Kenneth Swanson ------------------------------ Name: Kenneth Swanson 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. Paul, 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. Paul office of the Warrant Agent, Wells Fargo Bank Minnesota, N.A , or may be obtained upon written request addressed to the Secretary, McLeodUSA Incorporated, 6400 C Street SW, Cedar Rapids, Iowa 52404. 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: WELLS 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) EX-99.24 6 ex19.txt EXHIBIT 99.24 Exhibit 99.24 AMENDMENT, dated as of April 16, 2002 (this "Amendment"), to the Amended and Restated Purchase Agreement, dated as of January 30, 2002 (the "Amended and Restated Purchase Agreement"), by and among McLeodUSA Incorporated and Forstmann Little & Co. Equity Partnership-VII, L.P., Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VIII, L.P., Forstmann Little & Co. Equity Partnership-V, L.P., Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VI, L.P. and Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VII, L.P. WHEREAS, the parties hereto desire to amend the Amended and Restated Purchase Agreement as provided herein. NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the meanings given such terms in the Amended and Restated Purchase Agreement. 2. Amendments to Amended and Restated Purchase Agreement. ----------------------------------------------------- 2.1. Section 4.5(a) of the Amended and Restated Purchase Agreement is hereby amended by deleting the last sentence thereof and replacing it with the following: "In the event that the holders of the Preferred Stock shall beneficially own less than 10% of the shares of Class A Common Stock beneficially owned by them immediately following the Closing (calculated as set forth in the Certificate of Designation) but shall beneficially own at least one share of Class A Common Stock, then the holders of the Preferred Stock shall be entitled to designate two "Board Observers" (as defined in Section 3(b) of the Certificate of Designation). In the event that the holders of the Preferred Stock shall become entitled to designate any Board Observer, whether pursuant to Section 3(b) of the Certificate of Designation or pursuant to this Section 4.5, such Board Observer shall have the rights set forth in Sections (d) through (f) of this Section 4.5." 2.2. Section 4.10(c) of the Amended and Restated Purchase Agreement is hereby amended by deleting clause (ii) thereof and replacing it with the following: "at least three members of the Board of Directors are officers of the Corporation selected by the Board of Directors; provided that each such officer shall hold one or more of the following titles: Chairperson; Chief Executive Officer; President; Chief Operating Officer or Chief Financial Officer (such three officers, the "Officers")." 2.3. Section 4.17 of the Amended and Restated Purchase Agreement is hereby amended by deleting clauses (ii), (iii) and (iv) thereof and replacing them with the following: "and (ii) the Officers." 3. Effectiveness of Amended and Restated Purchase Agreement. Except as expressly modified herein, all terms and provisions of the Amended and Restated Purchase Agreement shall remain in full force and effect and are hereby ratified and confirmed in all respects. 4. Modification. No change, modification or waiver of any provision of this Amendment shall be valid unless the same is in writing and signed by each of the parties hereto. 5. Governing Law. This Amendment shall be governed by and construed in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of Delaware without giving effect to the conflicts of law principles thereof. 6. Descriptive Headings. The descriptive headings of the several sections and paragraphs of this Amendment are inserted for reference only and shall not control or otherwise affect the meaning hereof. 7. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of the date first above written. McLEODUSA INCORPORATED By: /s/ Chris A. Davis ----------------------------------- Name: Chris A. Davis Title: Chief Operating and Financial Officer FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-VII, L.P. By: FLC XXXII Partnership, L.P. its general partner By:/s/ Thomas H. Lister ------------------------------- Thomas H. Lister, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VIII, L.P. By: FLC XXXIII Partnership, L.P. its general partner By:/s/ Thomas H. Lister ------------------------------- Thomas H. Lister, a general partner FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V, L.P. By: FLC XXX Partnership, L.P. its general partner By:/s/ Thomas H. Lister ------------------------------- Thomas H. Lister, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VI, L.P. By: FLC XXIX Partnership, L.P. its general partner By:/s/ Thomas H. Lister ------------------------------- Thomas H. Lister, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VII, L.P. By: FLC XXXIII Partnership, L.P. its general partner By:/s/ Thomas H. Lister ------------------------------- Thomas H. Lister, a general partner EX-99.25 7 ex20.txt EXHIBIT 99.25 Exhibit 99.25 TERMINATION AGREEMENT THIS TERMINATION AGREEMENT (this "Termination Agreement") is entered into as of April 16, 2002, by and between McLeodUSA Incorporated, a Delaware corporation (the "Company"), and the entities listed on the signature page hereto under the caption "FL Entities" (collectively, the "FL Entities"). WHEREAS, the Company and the FL Entities are parties to that certain Exchange Agreement, dated as of September 30, 2001 (the "Exchange Agreement") pursuant to which the FL Entities acquired shares of the Company's Series D Preferred Stock, par value $.01 per share (the "Series D Preferred"), and Series E Preferred Stock, par value $.01 per share (collectively with the Series D Preferred, the "2001 Preferred"); WHEREAS, the Company and the FL Entities are parties to that certain Registration Rights Agreement, dated as of September 30, 2001 (the "Original Registration Rights Agreement"); WHEREAS, the Company, the purchaser parties thereto and the FL Entities are parties to that certain Amended and Restated Purchase Agreement, dated as of January 30, 2002 (the "Purchase Agreement"), pursuant to which, among other things, the Company and the FL Entities agreed that at the closing of the transactions contemplated by the Restructuring, the Company and the FL Entities would enter into an agreement terminating the Exchange Agreement and confirming that the Original Registration Rights Agreement shall continue in full force and effect in accordance with its terms except as modified herein; WHEREAS, on January 31, 2002, the Company filed a plan of reorganization (the "Plan"), pursuant to which, among other things, the FL Entities will exchange their shares of 2001 Preferred for shares of the Company's Class B Common Stock, par value $.01 per share, and the Company's Class C Common Stock, par value $.0l per share, as part of a capital restructuring of the Company provided for in the Plan (the "Restructuring"); and NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. TERMINATION The Exchange Agreement shall be terminated in its entirety upon consummation of the Restructuring and shall thereafter be of no further force and effect, except (i) for the reimbursement of any unreimbursed expenses as provided in Section 4.6(c) of the Exchange Agreement and (ii) as provided in Section 2 hereof. 2. REGISTRATION RIGHTS The Parties agree and confirm that the Original Registration Rights Agreement shall continue in full force and effect in accordance with its terms, except that: (i) the definition of Registrable Securities contained in the Original Registration Rights Agreement is hereby deleted in its entirety and replaced with the following definition: "'Registrable Securities' means (i) any shares of Common Stock owned by the Purchasers, (ii) any shares of Common Stock issued or issuable upon the conversion, exercise or exchange of any shares of Class B Common Stock, Class C Common Stock or any other Common Stock equivalents at any time held by the Purchasers, and (iii) any shares of Common Stock issued with respect to the Common Stock referred to in clauses (i) or (ii) by way of a stock dividend, stock split or reverse stock split or in connection with a combination of shares, recapitalization, merger, consolidation or otherwise. For purposes of this Agreement, a Purchaser shall be deemed to own Registrable Securities whenever such Purchaser has the right to acquire such Registrable Securities (upon conversion, exercise or otherwise) and such Purchaser shall not be required to convert or exercise such securities to participate in any registered offering hereunder prior to the closing of such offering. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities (a) when a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) when such securities shall have been otherwise transferred or disposed of and new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent transfer or distribution of them shall not require registration of them under the Securities Act, or (c) when such securities shall have been sold as permitted by, and in compliance with, the Securities Act unless any of the registration rights contained herein shall have been assigned to the purchaser or other transferee of such securities pursuant to Section 7 hereof."; (ii) the first sentence of Section 2.1 (a) of the Original Registration Rights Agreement is hereby amended to delete the phrase: "At any time or from time to time that the Purchasers are permitted to transfer Registrable Securities under Section 4.12 of the Exchange Agreement"; (iii) the first sentence of Section 2.2(a) of the Original Registration Rights Agreement is hereby amended to delete the phrase: "and provided that the Purchasers are permitted to transfer Registrable Securities under Section 4.12 of the Exchange Agreement"; (iv) the first sentence of Section 3 of the Original Registration Rights Agreement is hereby amended to delete the phrase: "Without limiting in any way the provisions of Section 4.12 of the Exchange Agreement"; and (v) Section 7 of the Original Registration Rights Agreement shall be modified by deleting the third sentence thereof and replacing it with the following sentence: "This Agreement may not be assigned by any of the Purchasers, without the prior written consent of the Company (which consent shall not be unreasonably withheld); provided however, the Purchasers may, at their election, at any time or from time to time, assign their rights under this Agreement, in whole or in part, to any Affiliates of the Purchasers; provided further, however, that if any rights under this Agreement shall have been assigned by any of the Purchasers to an Affiliate, then any rights to withdraw shares from inclusion in a registration statement pursuant to Section 2 shall be made only by the Purchasers for themselves and all such Affiliates." 3. MISCELLANEOUS 3.1 BINDING EFFECT This Termination Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 3.2 GOVERNING LAW THIS TERMINATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW. 3.3 SUBMISSION TO JURISDICTION Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Delaware and of the United States of America in each case located in the State of Delaware for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to its respective address set forth in Section 3.5 shall be effective service of process for any litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Delaware or of the United States of America in each case located in the State of Delaware and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such litigation brought in any such court has been brought in an inconvenient forum. 3.4 WAIVER OF JURY TRIAL THE COMPANY AND THE FL ENTITIES HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS TERMINATION AGREEMENT. 3.5 NOTICES All notices, requests, consents and other communications hereunder to any party hereto shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by telecopy, nationally recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties: (i) if to the Company, to: McLeodUSA Incorporated McLeodUSA Technology Park 6400 C Street SW PO Box 3177 Cedar Rapids, Iowa 52406-3177 Telecopy No.: (319) 790-7901 Attention: Randall Rings, Esq. Group Vice President and Chief Legal Officer with a copy to (which shall not constitute notice): Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive, Suite 2100 Chicago, IL 60606 Telecopy No.: (312) 407-0411 Attention: Peter C. Krupp, Esq. (ii) if to the FL Entities, to: c/o Forstmann Little & Co. 767 Fifth Avenue New York, NY 10153 Telecopy No.: (212) 759-9059 Attention: Thomas Lister with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, NY 10004 Telecopy No.: (212) 859-8587 Attention: Aviva Diamant, Esq. All such notices, requests, consents and other communications shall be deemed to have been given or made if and when delivered personally or by overnight courier to the parties at the above addresses or sent by electronic transmission, with confirmation received, to the telecopy numbers specified above (or at such other address or telecopy number for a party as shall be specified by like notice). 3.6 EXECUTION This Termination Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. * * * IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Termination Agreement as of the date first above written. FL ENTITIES FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V, L.P. By: FLC XXX Partnership, L.P. its general partner By:/s/ Thomas H. Lister -------------------------------- Thomas H. Lister, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VI, L.P. By: FLC XXIX Partnership, L.P. its general partner By:/s/ Thomas H. Lister -------------------------------- Thomas H. Lister, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VII, L.P. By: FLC XXXIII Partnership, L.P. its general partner By:/s/ Thomas H. Lister -------------------------------- Thomas H. Lister, a general partner MCLEODUSA INCORPORATED By:/s/ Chris A. Davis -------------------------------- Name: Chris A. Davis Title: Chief Operating and Financial Officer EX-99.26 8 ex21.txt EXHIBIT 99.26 Exhibit 99.26 REGISTRATION RIGHTS AGREEMENT Dated as of April 16, 2002 between McLEODUSA INCORPORATED and The Purchasers Listed on the Signature Pages Hereto REGISTRATION RIGHTS AGREEMENT, dated as of April 16, 2002, between McLeodUSA Incorporated, a Delaware corporation (the "Company"), and Forstmann Little & Co. Equity Partnership-VII, L.P., a Delaware limited partnership ("Equity-VII"), and Forstmann Little & Co. Subordinated Debt and Equity Management Buyout Partnership-VIII, L.P., a Delaware limited partnership ("MBO-VIII") (and, collectively with Equity-VII, the "Purchasers"). WHEREAS, the Company and the Purchasers have entered into an Amended and Restated Purchase Agreement (the "Purchase Agreement"), dated as of January 30, 2002, pursuant to which the Purchasers have, among other things, agreed to purchase (i) an aggregate of 74,027,764 shares of the Company's Class A Common Stock, par value $.01 per share; (ii) an aggregate of 10 shares of the Company's Series B Preferred Stock, par value $.01 per share and (iii) a warrant or warrants to purchase an aggregate of 22,159,091 shares of the Company's Class A Common Stock, par value $.01 per share (the "Warrants"). WHEREAS, as part of, and as consideration for, the purchase by the Purchasers of the securities of the Company under the Purchase Agreement, the Company agrees to grant to the Purchasers certain registration and other rights with respect to their shares of Class A Common Stock. NOW, THEREFORE, the parties hereto agree as follows: 1. Definitions. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: "Affiliate" has the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "Certificate of Incorporation" means the Second Amended and Restated Certificate of Incorporation of the Company, as it may be amended or restated hereafter from time to time. "Commission" means the Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act. "Common Stock" means any shares of Class A Common Stock of the Company, now or hereafter authorized to be issued, and any and all securities of any kind whatsoever of the Company which may be exchanged for or converted into Class A Common Stock, and any and all securities of any kind whatsoever of the Company which may be issued on or after the date hereof in respect of, in exchange for, or upon conversion of shares of Class A Common Stock pursuant to a merger, consolidation, stock split, stock dividend, recapitalization of the Company or otherwise. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Exchange Act shall include a reference to the comparable section, if any, of any such similar Federal statute. "Person" means a corporation, an association, a partnership, an organization, a business, a trust, an individual, or any other entity or organization, including a government or political subdivision or an instrumentality or agency thereof. "Registrable Securities" means (i) any shares of Common Stock owned by the Purchasers, (ii) any shares of Common Stock issued or issuable upon the conversion, exercise or exchange of the Warrants or any other Common Stock equivalents at any time held by the Purchasers, and (iii) any shares of Common Stock issued with respect to the Common Stock referred to in clauses (i) or (ii) by way of a stock dividend, stock split or reverse stock split or in connection with a combination of shares, recapitalization, merger, consolidation or otherwise. For purposes of this Agreement, a Purchaser shall be deemed to own Registrable Securities whenever such Purchaser has the right to acquire such Registrable Securities (upon conversion, exercise or otherwise) and such Purchaser shall not be required to convert or exercise such securities to participate in any registered offering hereunder prior to the closing of such offering. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities (a) when a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) when such securities shall have been otherwise transferred or disposed of and new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent transfer or distribution of them shall not require registration of them under the Securities Act, or (c) when such securities shall have been sold as permitted by, and in compliance with, the Securities Act unless any of the registration rights contained herein shall have been assigned to the purchaser or other transferee of such securities pursuant to Section 7 hereof. "Registration Expenses" means all expenses incident to the registration and disposition of the Registrable Securities pursuant to Section 2 hereof, including, without limitation, all registration, filing and applicable national securities exchange fees, all fees and expenses of complying with state securities or blue sky laws (including fees and disbursements of counsel to the underwriters or the Purchasers in connection with "blue sky" qualification of the Registrable Securities and determination of their eligibility for investment under the laws of the various jurisdictions), all word processing, duplicating and printing expenses, all messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of "cold comfort" letters or any special audits required by, or incident to, such registration, all fees and disbursements of underwriters (other than underwriting discounts and commissions), all transfer taxes, and all fees and expenses of counsel to the Purchasers; provided, however, that Registration Expenses shall exclude, and the Purchasers shall pay, underwriting discounts and commissions in respect of the Registrable Securities being registered. "Securities Act" means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. References to a particular section of the Securities Act shall include a reference to the comparable section, if any, of any such similar Federal statute. 2. Registration Under Securities Act, etc. --------------------------------------- 2.1 Registration on Request. ----------------------- (a) Request. The Purchasers shall have the right to require the Company to effect the registration under the Securities Act of all or part of the Registrable Securities, by delivering a written request therefor to the Company specifying the number of shares of Registrable Securities and the intended method of distribution. The Company shall (i) use its reasonable best efforts to effect the registration under the Securities Act (including by means of a shelf registration pursuant to Rule 415 under the Securities Act if so requested in such request and if the Company is then eligible to use such a registration) of the Registrable Securities which the Company has been so requested to register by the Purchasers, for distribution in accordance with the intended method of distribution set forth in the written request delivered by the Purchasers, such registration to be effected as expeditiously as possible (but in any event within 90 days of receipt of a written request), and (ii) if requested by the Purchasers, use its reasonable best efforts to obtain acceleration of the effective date of the registration statement relating to such registration. (b) Registration of Other Securities. Whenever the Company shall effect a registration pursuant to this Section 2.1 in connection with an underwritten offering by the Purchasers of Registrable Securities, no securities other than Registrable Securities shall be included among the securities covered by such registration if inclusion of such other securities would result in a request by the managing underwriters for a reduction in the number of Registrable Securities requested to be so registered. (c) Registration Statement Form. Registrations under this Section 2.1 shall be on such appropriate registration form of the Commission as, subject to clause (a)(i) above, shall be selected by the Company and as shall be reasonably acceptable to the Purchasers. The Company agrees to include in any such registration statement all information which, in the opinion of counsel to the Purchasers and counsel to the Company, is necessary or desirable to be included therein. (d) Expenses. The Company shall pay all Registration Expenses in connection with any registration requested pursuant to this Section 2.1. (e) Effective Registration Statement. A registration requested pursuant to this Section 2.1 shall not be deemed to have been effected (including for purposes of paragraph (h) of this Section 2.1) (i) unless a registration statement with respect thereto has become effective and has been kept continuously effective for a period of at least 365 days (or such shorter period which shall terminate when all the Registrable Securities covered by such registration statement have been sold pursuant thereto), (ii) if after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to the Purchasers and has not thereafter become effective, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived. (f) Selection of Underwriters. The managing underwriters of each underwritten offering of the Registrable Securities so to be registered shall be selected by the Purchasers, subject to the Company's approval, which approval shall not be unreasonably withheld. (g) Right to Withdraw. If the managing underwriter of any underwritten offering shall advise the Purchasers that the Registrable Securities covered by the registration statement cannot be sold in such offering within a price range acceptable to the Purchasers, then the Purchasers shall have the right to notify the Company in writing that they have determined to withdraw their shares from the registration statement. In the event of such withdrawal, the request for registration shall not be counted for purposes of the requests for registration to which the Purchasers are entitled pursuant to this Section 2.1. (h) Limitations on Registration on Request. The Purchasers shall be entitled to require the Company to effect, and the Company shall be required to effect, three registrations in the aggregate pursuant to this Section 2.1. (i) Postponement. The Company shall be entitled once in any six-month period to postpone for a reasonable period of time (but not exceeding 60 days) (the "Postponement Period") the filing of any registration statement required to be prepared and filed by it pursuant to this Section 2.1 if the Company determines, in its reasonable judgment, that such registration and offering would materially interfere with any material financing, corporate reorganization or other material transaction involving the Company or any subsidiary, or would require premature disclosure thereof, and promptly gives the Purchasers written notice of such determination, containing a general statement of the reasons for such postponement and an approximation of the anticipated delay. If the Company shall so postpone the filing of a registration statement, (i) the Company shall use its reasonable best efforts to limit the delay to as short a period as is practicable and (ii) the Purchasers shall have the right to withdraw the request for registration by giving written notice to the Company at any time and, in the event of such withdrawal, such request shall not be counted for purposes of the requests for registration to which the Purchasers are entitled pursuant to this Section 2.1. 2.2 Incidental Registration. ----------------------- (a) Right to Include Registrable Securities. If the Company at any time proposes to register any of its securities for the account of any other stockholder under the Securities Act by registration on Form S-1, S-2 or S-3 or any successor or similar form(s) (except registrations on any such Form or similar form(s) solely for registration of securities in connection with an employee benefit plan or dividend reinvestment plan or a merger or consolidation), the Company will each such time give prompt written notice to the Purchasers of its intention to do so and of the Purchasers' rights under this Section 2.2. Upon the written request of the Purchasers (which request shall specify the maximum number of Registrable Securities intended to be disposed of by the Purchasers), made as promptly as practicable and in any event within 30 days after the receipt of any such notice (10 days if the Company states in such written notice or gives telephonic notice to the Purchasers, with written confirmation to follow promptly thereafter, stating that (i) such registration will be on Form S-3 and (ii) such shorter period of time is required because of a planned filing date), the Company shall use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Purchasers; provided, however, that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company shall give written notice of such determination and its reasons therefor to the Purchasers and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of the Purchasers to request that such registration be effected as a registration under Section 2.1 and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in registering such other securities. No registration effected under this Section 2.2 shall relieve the Company of its obligation to effect any registration upon request under Section 2.1. The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 2.2. (b) Right to Withdraw. The Purchasers shall have the right to withdraw their request for inclusion of their Registrable Securities in any registration statement pursuant to this Section 2.2 at any time prior to the execution of an underwriting agreement with respect thereto by giving written notice to the Company of its request to withdraw. (c) Priority in Incidental Registrations. If the managing underwriter of any underwritten offering shall inform the Company by letter of its belief that the number of Registrable Securities requested to be included in such registration, when added to the number of other securities to be offered in such registration, would materially adversely affect such offering, then the Company shall include in such registration, to the extent of the number and type which the Company is so advised can be sold in (or during the time of) such offering without so materially adversely affecting such offering (the "Section 2.2 Sale Amount"), (i) all of the securities proposed by the other stockholders triggering such incidental registration rights; and (ii) thereafter, to the extent the Section 2.2 Sale Amount is not exceeded, the Registrable Securities requested by the Purchasers to be included in such registration pursuant to Section 2.2(a) and any other securities of the Company requested to be included in such registration by any holder having the right to include securities on a pro rata basis, including, in the case where such registration is to be effected as a result of the exercise by a holder of the Company's securities of such holder's right to cause such securities to be so registered, the securities of such holder with the amount of securities of the Purchasers and each such holder to be included based on the pro rata amount of shares of Common Stock held, or obtainable by exercise or conversion of other securities of the Company, by the Purchasers or such holder. (d) Plan of Distribution. Any participation by holders of Registrable Securities in a registration by the Company shall be in accordance with the Company's plan of distribution, provided that the Purchasers shall have the right to select the co-managing underwriter. 2.3 Registration Procedures. If and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 2.1 and 2.2 hereof, the Company shall as expeditiously as possible: (a) prepare and file with the Commission as soon as practicable the requisite registration statement to effect such registration (and shall include all financial statements required by the Commission to be filed therewith) and thereafter use its reasonable best efforts to cause such registration statement to become effective; provided, however, that before filing such registration statement (including all exhibits) or any amendment or supplement thereto or comparable statements under securities or blue sky laws of any jurisdiction, the Company shall as promptly as practicable furnish such documents to the Purchasers and each underwriter, if any, participating in the offering of the Registrable Securities and their respective counsel, which documents will be subject to the review and comments of the Purchasers, each underwriter and their respective counsel; and provided, further, however, that the Company may discontinue any registration of its securities which are not Registrable Securities at any time prior to the effective date of the registration statement relating thereto; (b) notify the Purchasers of the Commission's requests for amending or supplementing the registration statement and the prospectus, and prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement for such period as shall be required for the disposition of all of such Registrable Securities in accordance with the intended method of distribution thereof; provided, that except with respect to any such registration statement filed pursuant to Rule 415 under the Securities Act, such period need not exceed 365 days; (c) furnish, without charge, to the Purchasers and each underwriter such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as the Purchasers and such underwriters may reasonably request; (d) use its reasonable best efforts (i) to register or qualify all Registrable Securities and other securities covered by such registration statement under such securities or blue sky laws of such States of the United States of America where an exemption is not available and as the Purchasers or any managing underwriter shall reasonably request, (ii) to keep such registration or qualification in effect for so long as such registration statement remains in effect, and (iii) to take any other action which may be reasonably necessary or advisable to enable the Purchasers to consummate the disposition in such jurisdictions of the securities to be sold by the Purchasers, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subsection (d) be obligated to be so qualified or to consent to general service of process in any such jurisdiction; (e) use its reasonable best efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such other federal or state governmental agencies or authorities as may be necessary in the opinion of counsel to the Company and counsel to the Purchasers to consummate the disposition of such Registrable Securities; (f) furnish to the Purchasers and each underwriter, if any, participating in the offering of the securities covered by such registration statement, a signed counterpart of (i) an opinion of counsel for the Company, and (ii) a "comfort" letter signed by the independent public accountants who have certified the Company's or any other entity's financial statements included or incorporated by reference in such registration statement, covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountants' comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' comfort letters delivered to the underwriters in underwritten public offerings of securities (and dated the dates such opinions and comfort letters are customarily dated); (g) promptly notify the Purchasers and each managing underwriter, if any, participating in the offering of the securities covered by such registration statement (i) when such registration statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto or post-effective amendment to such registration statement has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission for amendments or supplements to such registration statement or the prospectus related thereto or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any of the Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation of any proceeding for such purpose; (v) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, in the light of the circumstances under which they were made, and in the case of this clause (v), at the request of the Purchasers promptly prepare and furnish to the Purchasers and each managing underwriter, if any, participating in the offering of the Registrable Securities, a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made; and (vi) at any time when the representations and warranties of the Company contemplated by Section 2.4(a) or (b) hereof cease to be true and correct; (h) otherwise comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and promptly furnish to the Purchasers a copy of any amendment or supplement to such registration statement or prospectus; (i) provide and cause to be maintained a transfer agent and registrar (which, in each case, may be the Company) for all Registrable Securities covered by such registration statement from and after a date not later than the effective date of such registration; (j) (i) use its reasonable best efforts to cause all Registrable Securities covered by such registration statement to be listed on the NASDAQ "national market system" or the principal securities exchange on which similar securities issued by the Company are then listed (if any), if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) if no similar securities are then so listed, use its reasonable best efforts to (x) cause all such Registrable Securities to be listed on a national securities exchange or (y) failing that, secure designation of all such Registrable Securities as a NASDAQ "national market system security" within the meaning of Rule 11Aa2-1 of the Commission or (z) failing that, to secure NASDAQ authorization for such shares and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such shares with the National Association of Securities Dealers, Inc.; (k) deliver promptly to counsel to the Purchasers and each underwriter, if any, participating in the offering of the Registrable Securities, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to such registration statement; (l) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement; (m) provide a CUSIP number for all Registrable Securities, no later than the effective date of the registration statement; and (n) make available its senior executive officers and chairman and otherwise provide reasonable assistance to the underwriters (taking into account the needs of the Company's business) in their marketing of Registrable Securities. The Company may require the Purchasers to furnish the Company such information regarding the Purchasers and the distribution of the Registrable Securities as the Company may from time to time reasonably request in writing. The Purchasers agree that upon receipt of any notice from the Company of the happening of any event of the kind described in paragraph (g)(iii), (iv) or (v) of this Section 2.3, the Purchasers will, to the extent appropriate, discontinue their disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until, in the case of paragraph (g)(v) of this Section 2.3, their receipt of the copies of the supplemented or amended prospectus contemplated by paragraph (g)(v) of this Section 2.3 and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in its possession, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. If the disposition by the Purchasers of their securities is discontinued pursuant to the foregoing sentence, the Company shall extend the period of effectiveness of the registration statement by the number of days during the period from and including the date of the giving of notice to and including the date when the Purchasers shall have received copies of the supplemented or amended prospectus contemplated by paragraph (g)(v) of this Section 2.3; and, if the Company shall not so extend such period, the Purchasers' request pursuant to which such registration statement was filed shall not be counted for purposes of the requests for registration to which the Purchasers are entitled pursuant to Section 2.1 hereof. 2.4 Underwritten Offerings. ---------------------- (a) Requested Underwritten Offerings. If requested by the underwriters for any underwritten offering by the Purchasers pursuant to a registration requested under Section 2.1, the Company shall enter into a customary underwriting agreement (in the form of underwriting agreement used at such time by the managing underwriter(s)) with a managing underwriter or underwriters selected by the Purchasers. Such underwriting agreement shall be satisfactory in form and substance to the Purchasers and shall contain such representations and warranties by, and such other agreements on the part of, the Company and such other terms as are generally prevailing in agreements of the managing underwriter(s), including, without limitation, their customary provisions relating to indemnification and contribution. The Purchasers shall be party to such underwriting agreement and may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of the Purchasers and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of the Purchasers. The Purchasers shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding the Purchasers, their ownership of and title to the Registrable Securities, and their intended method of distribution; and any liability of the Purchasers to any underwriter or other person under such underwriting agreement shall be limited to liability arising from breach of their representations and warranties and shall be limited to an amount equal to the proceeds (net of expenses and underwriting discounts and commissions) that they derive from such registration. (b) Incidental Underwritten Offerings. In the case of a registration pursuant to Section 2.2 hereof, if the Company shall have determined to enter into any underwriting agreements in connection therewith, all of the Registrable Securities to be included in such registration shall be subject to such underwriting agreements. The Purchasers may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of the Purchasers and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of the Purchasers. The Purchasers shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding the Purchasers, their ownership of and title to the Registrable Securities, and their intended method of distribution; and any liability of the Purchasers to any underwriter or other Person under such underwriting agreement shall be limited to liability arising from breach of their representations and warranties and shall be limited to an amount equal to the proceeds (net of expenses and underwriting discounts and commissions) that they derive from such registration. 2.5 Preparation; Reasonable Investigation. In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company will give the Purchasers, their underwriters, if any, and their respective counsel, accountants and other representatives and agents the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and give each of them such access to its books and records and such opportunities to discuss the business of the Company with its officers and employees and the independent public accountants who have certified its financial statements, and supply all other information reasonably requested by each of them, as shall be necessary or appropriate, in the opinion of the Purchasers and such underwriters' respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. 2.6 Indemnification. (a) Indemnification by the Company. The Company agrees that in the event of any registration of any Registrable Securities of the Company under this Registration Rights Agreement the Company shall, and hereby does, indemnify and hold harmless the Purchasers, their respective directors, officers, members, partners, agents and affiliates and each other Person who participates as an underwriter in the offering or sale of such securities and each other Person, if any, who controls the Purchasers or any such underwriter within the meaning of the Securities Act, against any losses, claims, damages, or liabilities, joint or several, to which the Purchasers or any such director, officer, member, partner, agent or affiliate or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities, joint or several (or actions or proceedings, whether commenced or threatened, in respect thereof), arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading, or (iii) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration, and the Company shall reimburse the Purchasers and each such director, officer, member, partner, agent or affiliate, underwriter and controlling Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; provided that the Company shall not be liable in any such case to the Purchasers or any such director, officer, member, partner, agent, affiliate, or controlling person to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by or on behalf of the Purchasers, specifically stating that it is for use in the preparation thereof. Such indemnity shall remain in full force regardless of any investigation made by or on behalf of the Purchasers or any such director, officer, member, partner, agent, affiliate, underwriter or controlling Person and shall survive the transfer of such securities by the Purchasers. (b) Indemnification by the Purchasers. As a condition to including any Registrable Securities in any registration statement, the Company shall have received an undertaking reasonably satisfactory to it from the Purchasers so including any Registrable Securities to indemnify and hold harmless (in the same manner and to the same extent as set forth in paragraph (a) of this Section 2.6) the Company, and each director of the Company, each officer of the Company and each other Person, if any, who controls the Company within the meaning of the Securities Act, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, but only to the extent such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by the Purchasers specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; provided, however, that the liability of any such indemnifying party under this Section 2.6(b) shall be limited to the amount of proceeds (net of expenses and underwriting discounts and commissions) received by such indemnifying party in the offering giving rise to such liability. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by the Purchasers. (c) Notices of Claims, etc. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding subsections of this Section 2.6, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action or proceeding; provided, however, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subsections of this Section 2.6, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice, and shall not relieve the indemnifying party from any liability which it may have to the indemnified party otherwise than under this Section 2.6. In case any such action or proceeding is brought against an indemnified party, the indemnifying party shall be entitled to participate therein and, unless in the opinion of outside counsel to the indemnified party a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action or proceeding include both the indemnified party and the indemnifying party and if in the opinion of outside counsel to the indemnified party there may be legal defenses available to such indemnified party and/or other indemnified parties which are different from or in addition to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to defend such action or proceeding on behalf of such indemnified party or parties, provided, however, that the indemnifying party shall be obligated to pay for only one counsel and one local counsel for all indemnified parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by the indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified party for any legal expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation (unless the first proviso in the preceding sentence shall be applicable). No indemnifying party shall be liable for any settlement of any action or proceeding effected without its written consent. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. (d) Contribution. If the indemnification provided for in this Section 2.6 shall for any reason be held by a court to be unavailable to an indemnified party under subsection (a) or (b) hereof in respect of any loss, claim, damage or liability, or any action in respect thereof, then, in lieu of the amount paid or payable under subsection (a) or (b) hereof, the indemnified party and the indemnifying party under subsection (a) or (b) hereof shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating the same), (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand, and the indemnified party on the other, with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or if the allocation provided in this clause (ii) provides a greater amount to the indemnified party than clause (i) above, in such proportion as shall be appropriate to reflect not only the relative fault but also the relative benefits received by the indemnifying party and the indemnified party from the offering of the securities covered by such registration statement as well as any other relevant equitable considerations. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 2.6(d) were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the preceding sentence of this Section 2.6(d). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. In addition, no Person shall be obligated to contribute hereunder any amounts in payment for any settlement of any action or claim effected without such Person's consent, which consent shall not be unreasonably withheld. Notwithstanding anything in this subsection (d) to the contrary, no indemnifying party (other than the Company) shall be required to contribute any amount in excess of the proceeds (net of expenses and underwriting discounts and commissions) received by such party from the sale of the Registrable Securities in the offering to which the losses, claims, damages or liabilities of the indemnified parties relate. (e) Other Indemnification. Indemnification and contribution similar to that specified in the preceding subsections of this Section 2.6 (with appropriate modifications) shall be given by the Company and the Purchasers with respect to any required registration or other qualification of securities under any federal, state or blue sky law or regulation of any governmental authority other than the Securities Act. The indemnification agreements contained in this Section 2.6 shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any indemnified party and shall survive the transfer of any of the Registrable Securities by the Purchasers. (f) Indemnification Payments. The indemnification and contribution required by this Section 2.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. 2.7 Unlegended Certificates. In connection with the offering of any Registrable Securities registered pursuant to this Section 2, the Company shall (i) facilitate the timely preparation and delivery to the Purchasers and the underwriters, if any, participating in such offering, of unlegended certificates representing ownership of such Registrable Securities being sold in such denominations and registered in such names as requested by the Purchasers or such underwriters and (ii) instruct any transfer agent and registrar of such Registrable Securities to release any stop transfer orders with respect to any such Registrable Securities. 2.8 Limitation on Sale of Securities. The Company hereby agrees that if it shall previously have received a request for registration pursuant to Section 2.1 or 2.2 hereof, and if such previous registration shall not have been withdrawn or abandoned, the Company shall not effect any public or private offer, sale or distribution of its securities or effect any registration of any of its equity securities under the Securities Act whether or not for sale for its own account, until a period of 90 days (or such shorter period as the Purchasers shall be advised by their managing underwriter) shall have elapsed from the effective date of such previous registration, and the Company shall so provide in any registration rights agreements hereafter entered into with respect to any of its securities provided, however, that during this 90 day period the Company may (i) offer, sell and distribute its equity securities in connection with acquisitions or any Company employee or director benefit or stock purchase or stock option plans, (ii) grant or award Common Stock, options to purchase Common Stock in connection with acquisitions or under such Company plans and (iii) take any other actions necessary in connection with any of the foregoing in order to register such Common Stock with the Commission. 2.9 No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of the Purchasers to sell any Registrable Securities pursuant to any effective registration statement. 3. Rule 144. The Company shall take all actions reasonably necessary to enable holders of Registrable Securities to sell such securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144, or (ii) any similar rule or regulation hereafter adopted by the Commission including, without limiting the generality of the foregoing, filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of the Purchasers, the Company will deliver to such holder a written statement as to whether it has complied with such requirements. 4. Amendments and Waivers. This Agreement may be amended, modified or supplemented only by written agreement of the party against whom enforcement of such amendment, modification or supplement is sought. 5. [INTENTIONALLY OMITTED] 6. Notice. All notices and other communications hereunder shall be in writing and, unless otherwise provided herein, shall be deemed to have been given when received by the party to whom such notice is to be given at its address set forth below, or such other address for the party as shall be specified by notice given pursuant hereto: (a) If to the Purchasers, to: c/o Forstmann Little & Co. 767 Fifth Avenue New York, NY 10153 Attention: Thomas H. Lister With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Aviva Diamant, Esq. (b) If to the Company, to it at: McLeodUSA Incorporated McLeodUSA Technology Park 6400 C Street SW PO Box 3177 Cedar Rapids, Iowa 52406-3177 Telecopy No.: (319) 790-7901 Attention: Randall Rings, Esq. Group Vice President and Chief Legal Officer with a copy to (which shall not constitute notice): Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive, Suite 2100 Chicago, IL 60606 Telecopy No.: (312) 407-0411 Attention: Peter C. Krupp, Esq. 7. Assignment; Third Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by the Company, without the prior written consent of the Purchasers. This Agreement may not be assigned by any of the Purchasers, without the prior written consent of the Company (which consent shall not be unreasonably withheld); provided however, the Purchasers may, at their election, at any time or from time to time, assign their rights under this Agreement, in whole or in part, to any Affiliates of the Purchasers; provided further, however, that if any rights under this Agreement shall have been assigned by any of the Purchasers to an Affiliate, then any rights to withdraw shares from inclusion in a registration statement pursuant to Section 2 shall be made only by the Purchasers for themselves and all such Affiliates. 8. Remedies. The parties hereto agree that money damages or other remedy at law would not be sufficient or adequate remedy for any breach or violation of, or a default under, this Agreement by them and that, in addition to all other remedies available to them, each of them shall be entitled to an injunction restraining such breach, violation or default or threatened breach, violation or default and to any other equitable relief, including without limitation specific performance, without bond or other security being required. In any action or proceeding brought to enforce any provision of this Agreement (including the indemnification provisions thereof), the successful party shall be entitled to recover reasonable attorneys' fees in addition to its costs and expenses and any other available remedy. 9. No Inconsistent Agreements. The Company will not, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Purchasers in this Agreement or otherwise conflicts with the provisions hereof. The Company further represents and warrants that the rights granted to the Purchasers hereunder do not in any way conflict with and are not inconsistent with any other agreements to which the Company is a party or by which it is bound. The Company further agrees that if any other registration rights agreement entered into after the date of this Agreement with respect to any of its securities contains terms which are more favorable to, or less restrictive on, the other party thereto than the terms and conditions contained in this Agreement are (insofar as they are applicable) with respect to the Purchasers, then the terms and conditions of this Agreement shall immediately be deemed to have been amended without further action by the Company or the Purchasers so that the Purchasers shall be entitled to the benefit of any such more favorable or less restrictive terms or conditions. 10. Descriptive Headings. The descriptive headings of the several sections and paragraphs of this Agreement are inserted for reference only and shall not control or otherwise affect the meaning hereof. 11. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof. Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of New York and the United States of America located in the County of New York for any action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any action or proceeding relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to its respective address set forth in Section 6 hereof shall be effective service of process for any action or proceeding brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any action or proceeding arising out of this Agreement or the transactions contemplated hereby in the courts of the State of New York or the United States of America located in the County of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. 12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. 13. Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction. If any restriction or provision of this Agreement is held unreasonable, unlawful or unenforceable in any respect, such restriction or provision shall be interpreted, revised or applied in a manner that renders it lawful and enforceable to the fullest extent possible under law. 14. Further Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and things and shall execute and deliver all other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 15. Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized. McLEODUSA INCORPORATED By: /s/ Chris A. Davis ---------------------------------- Name: Chris A. Davis Title: Chief Operating and Financial Officer FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-VII, L.P. By: FLC XXXII Partnership, L.P. its general partner By:/s/ Thomas H. Lister -------------------------------- Thomas H. Lister, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VIII, L.P. By: FLC XXXIII Partnership, L.P. its general partner By:/s/ Thomas H. Lister -------------------------------- Thomas H. Lister, a general partner EX-99.27 9 ex22.txt EXHIBIT 99.27 Exhibit 99.27 JOINT FILING AGREEMENT The undersigned hereby acknowledge and agree that any amendment to the Schedule 13D, relating to the Class A common stock, par value $0.01 per share, of McLeodUSA Incorporated, on or after the date as of which this joint filing agreement (this "Agreement") is made, is and will be filed jointly by the undersigned with the Securities and Exchange Commission pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, on behalf of each such person. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that it knows or has reason to believe that such information is inaccurate. This Agreement may be executed in counterparts and each of such counterparts taken together shall constitute one and the same instrument. Dated: April 22, 2002 FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP- VI, L.P. By: FLC XXIX Partnership, L.P., its general partner By: /s/ Winston W. Hutchins ------------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VII, L.P. By: FLC XXXIII Partnership, L.P., its general partner By: /s/ Winston W. Hutchins ------------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V, L.P. By: FLC XXX Partnership, L.P., its general partner By: /s/ Winston W. Hutchins ------------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP- VIII, L.P. By: FLC XXXIII Partnership, L.P., its general partner By: /s/ Winston W. Hutchins ------------------------------------- Winston W. Hutchins, a general partner FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-VII, L.P. By: FLC XXXII Partnership, L.P., its general partner By: /s/ Winston W. Hutchins ------------------------------------- Winston W. Hutchins, a general partner /s/ Theodore J. Forstmann ----------------------------------- Theodore J. Forstmann /s/ Thomas H. Lister ----------------------------------- Thomas H. Lister -----END PRIVACY-ENHANCED MESSAGE-----