Exhibit 4.31
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
This Amended and Restated Stockholders' Agreement (this
"Agreement") is entered into as of August 10, 2000, by and among McLeodUSA
Incorporated, a Delaware corporation (the "Company"), ▇▇▇▇ ▇▇, a resident of
Texas ("Li"), and Linsang Partners, LLC, a Delaware limited liability company
("Linsang" and together with Li, the "Stockholders").
WHEREAS, in accordance with the terms and conditions of the
Amended and Restated Agreement and Plan of Merger, dated as of February 11, 2000
(the "Merger Agreement"), among the Company, Southside Acquisition Corporation,
a Delaware corporation and wholly owned subsidiary of the Company ("Southside"),
Splitrock Services, Inc., a Delaware corporation ("Splitrock"), Splitrock
Holdings, Inc., a Delaware corporation and wholly owned subsidiary of Splitrock
("Holdco"), and Splitrock Merger Sub, Inc., a Delaware corporation and wholly
owned subsidiary of Holdco, Southside merged with and into Holdco (the "Merger")
effective on March 30, 2000;
WHEREAS, Li is Chairman and Manager of Linsang and owns a
majority of the membership interest in Linsang;
WHEREAS, in accordance with the terms and conditions of the
Merger Agreement and as a condition to the obligation of each of the Company and
Southside to close the transactions contemplated thereby, the Stockholders
entered into a Stockholders' Agreement, dated as of March 30, 2000 (the
"Stockholders' Agreement"), with the Company;
WHEREAS, the Company effected a three-for-one stock split of its
Class A Common Stock (as defined below) in the form of a stock dividend paid on
April 24, 2000 to stockholders of record on April 4, 2000, and all share amounts
referred to in this Agreement have been adjusted to reflect such stock split;
and
WHEREAS, the Company and the Stockholders desire to amend and
restate the Stockholders' Agreement in its entirety with the terms and
conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the foregoing and of
the mutual covenants and agreements contained herein, the parties hereto hereby
agree to amend and restate the Stockholders' Agreement as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) A person shall be deemed the "beneficial owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such person or any of such person's
Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is
exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon
the exercise of conversion rights, exchange rights,
other rights, warrants or options, or otherwise;
(ii) which such person or any of such person's
Affiliates or Associates, directly or indirectly,
has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant
to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or
understanding, whether or not in writing; or
(iii) which are beneficially owned, directly or
indirectly, by any other person (or any Affiliate
or Associate thereof) with which such person or any
of such person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring,
holding, voting or disposing of any voting
securities of the Company.
(c) "Class A Common Stock" shall mean the Class A common
stock, par value $.01 per share, of the Company.
(d) "Covered Securities" shall mean (i) 7,315,647 shares of
Class A Common Stock owned beneficially and of record by
Li as a result of the Merger (excluding any shares
described in clause (ii) below), (ii) 22,829,639 shares
of Class A Common Stock owned beneficially and of record
by Linsang as a result of the Merger (including 100,583
shares of Class A Common Stock owned beneficially and of
record by Linsang as a result of the exercise of certain
warrants by Linsang on June 20, 2000), and (iii)
Securities issued or issuable with respect to the
Securities referred to in clauses (i) and (ii) above by
way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
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(e) "Expiration Date" shall mean December 31, 2002.
(f) "Securities" shall mean any equity securities of the
Company or any other securities convertible into or
exercisable for such equity securities.
2. TRANSFERS OF COVERED SECURITIES
2.1 RESTRICTIONS ON TRANSFERS
Except as otherwise provided in this Section 2, the Stockholders
hereby agree that until the Expiration Date, the Stockholders will not offer,
sell, contract to sell, grant any option to purchase, or otherwise dispose of,
directly or indirectly, ("Transfer"), any Covered Securities without submitting
a written request to, and receiving the prior written consent of, the Board of
Directors of the Company.
2.2 INITIAL TRANSFER PERIOD
For the period commencing as of the date of this Agreement and
ending December 31, 2000 (such period, the "Initial Transfer Period"), the
Stockholders may Transfer at any time and from time to time during such Initial
Transfer Period up to an aggregate number of shares of Class A Common Stock
which are Covered Securities equal to the Initial Transfer Amount, provided any
such Transfer is effected in accordance with all applicable laws (including
without limitation applicable federal and state securities laws). For purposes
of this Section 2.2, the Initial Transfer Amount shall be equal to the aggregate
number of shares of Class A Common Stock which are Covered Securities, which may
be Transferred from time to time during the Initial Transfer Period by the
Stockholders directly or through their Affiliates and Associates and which
result in aggregate gross proceeds of $105 million. The Stockholders shall
deliver to the Company a written report not later than September 11, 2000 for
the period commencing August 10, 2000 and ending August 31, 2000, and a written
report not later than October 10, 2000, November 10, 2000, December 11, 2000 and
January 10, 2001 for each of the months of September, October, November and
December 2000. Each such written report shall set forth the date and number of
shares of Class A Common Stock Transferred and the gross proceeds resulting
therefrom during each such month or portion thereof, as the case may be. In no
event shall any portion of the Initial Transfer Amount that is not utilized by
the Stockholders during the Initial Transfer Period be carried forward or
otherwise Transferred at any time during the period commencing January 1, 2001
and ending December 31, 2002. The allocation between Li and Linsang of the
Initial Transfer Amount shall be determined by Li as the Representative pursuant
to Section 4.9.
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2.3 SUBSEQUENT TRANSFER PERIODS
(a) Subject to Section 2.3(b), during each of the calendar years
ending December 31, 2001 and December 31, 2002 (each such year, a "Subsequent
Transfer Period" and together, the "Subsequent Transfer Periods"), the
Stockholders may Transfer at any time and from time to time during each such
Subsequent Transfer Period up to an aggregate number of shares of Class A Common
Stock which are Covered Securities equal to the Subsequent Transfer Amount,
provided any such Transfer is effected in accordance with all applicable laws
(including without limitation applicable federal and state securities laws). For
purposes of this Section 2.3, the Subsequent Transfer Amount shall be equal to
4,183,440 shares of Class A Common Stock, subject to adjustment pursuant to
Section 4.1. The Stockholders shall deliver to the Company a written report not
later than the tenth day of the first month following each calendar quarter
during the Subsequent Transfer Periods commencing with a report due on or before
April 10, 2001 for the quarter ending March 31, 2001 and ending with a report
due on or before January 10, 2003 for the quarter ending December 31, 2002. Each
such written report shall set forth the date and number of shares of Class A
Common Stock Transferred by the Stockholders during each such quarter. In no
event shall any portion of the Subsequent Transfer Amount that is not utilized
by the Stockholders during the Subsequent Transfer Period commencing January 1,
2001 and ending December 31, 2001 be carried forward or otherwise Transferred at
any time during the Subsequent Transfer Period commencing January 1, 2002 and
ending December 31, 2002. The allocation between Li and Linsang of the
Subsequent Transfer Amount shall be determined by Li as the Representative
pursuant to Section 4.9.
(b) Notwithstanding Section 2.3(a), the Stockholders shall not
Transfer any Covered Securities during any thirty (30) day period immediately
following written notice from the Company requesting the Stockholders not to
Transfer any Covered Securities during such thirty (30) day period if (i) the
Stockholders Transfer more than 200,000 shares of Class A Common Stock, subject
to adjustment pursuant to Section 4.1, on any single day during the Subsequent
Transfer Periods, and (ii) the Company determines that any such Transfer has
adversely affected the trading price of the Company's Securities on The Nasdaq
Stock Market's National Market System (or any comparable system).
2.4 LI PLEDGE
At any time following the date hereof, Li may pledge to a
nationally recognized financial institution (the "Pledgee") up to the aggregate
number of Covered Securities required by such Pledgee in order to secure
financing for the purchase of a Gulfstream IV or other similarly priced
aircraft; PROVIDED, HOWEVER, (i) such pledge complies with all applicable laws
(including without limitation applicable federal and state securities laws) and
(ii) the Pledgee takes such shares
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subject to the restrictions on Transfer of this Agreement and agrees to be
bound by the terms hereof (as this Agreement may be amended or amended and
restated from time to time) and to become a party hereto with respect to the
Covered Securities being pledged pursuant to this Section 2.4.
3. REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF LINSANG
Linsang hereby represents and warrants, as of the date of this
Agreement, to the Company as follows:
3.1.1 AUTHORIZATION
Linsang has taken all action necessary for it to enter into this
Agreement and to consummate the transactions contemplated hereby.
3.1.2 BINDING OBLIGATION
This Agreement constitutes a valid and binding obligation of
Linsang, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar laws
affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to be
executed by Linsang pursuant hereto, when executed and delivered in accordance
with the provisions hereof, shall be a valid and binding obligation of Linsang,
enforceable in accordance with its terms (with the aforesaid exceptions).
3.2 REPRESENTATIONS AND WARRANTIES OF ▇▇
▇▇ hereby represents and warrants, as of the date of this
Agreement, to the Company as follows:
3.2.1 POWER AND AUTHORITY
Li has the legal capacity and all other power and authority
necessary to enter into this Agreement and to consummate the transactions
contemplated hereby.
3.2.2 BINDING OBLIGATION
This Agreement constitutes a valid and binding obligation of
Li, enforceable in accordance with its terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, and similar laws
affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to
be executed by Li pursuant
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hereto, when executed and delivered in accordance with the provisions hereof,
shall be a valid and binding obligation of Li, enforceable in accordance with
its terms (with the aforesaid exceptions).
3.3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants, as of the date of
this Agreement, to each of Li and Linsang as follows:
3.3.1 AUTHORIZATION
The Company has taken all corporate action necessary for it to
enter into this Agreement and to consummate the transactions contemplated
hereby.
3.3.2 BINDING OBLIGATION
This Agreement constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar laws
affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to be
executed by the Company pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding obligation
of the Company, enforceable in accordance with its terms (with the aforesaid
exceptions).
4. MISCELLANEOUS
4.1 EFFECT OF CHANGES IN CAPITALIZATION
Each of the references to a number of shares of the Company's
capital stock referred to in this Agreement shall be appropriately and
proportionally adjusted for any recapitalization, reclassification, stock
split-up, combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company, occurring after
the date of this Agreement.
4.2 ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments, and to
obtain such consents, as may be necessary or as may be reasonably requested in
order to fully effectuate the purposes, terms and conditions of this Agreement.
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4.3 ENTIRE AGREEMENT; AMENDMENT
This Agreement, together with the amended and restated letter
agreement by and among the parties hereto dated as of the date hereof,
constitute the entire agreement among the parties hereto with respect to the
specific matters contemplated herein and therein and supersede all prior oral or
written agreements, commitments or understandings with respect to the matters
provided herein and therein. No amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by the Company and the Stockholders.
4.4 LIMITATION ON BENEFIT
It is the explicit intention of the parties hereto that no person
or entity other than the parties hereto is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of the parties
hereto, and the covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto or their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
4.5 BINDING EFFECT; SPECIFIC PERFORMANCE
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns. No party shall
assign this Agreement without the written consent of the other parties hereto;
and such consent shall not be unreasonably withheld. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
4.6 GOVERNING LAW
This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of Delaware (excluding the choice of law rules
thereof).
4.7 NOTICES
All notices, demands, requests, or other communications which may
be or are required to be given, served, or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand-delivered or
mailed by first-class, registered or certified mail, return receipt requested,
postage prepaid, or transmitted by telegram, telecopy, facsimile transmission or
telex, addressed as follows:
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(i) If to the Company:
McLeodUSA Incorporated
McLeodUSA Technology Park
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Rings, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to either of the Stockholders:
Linsang Partners, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each party may designate by notice in writing a new address to
which any notice, demand, request or communication may thereafter be so given,
served or sent. Each notice, demand, request or communication which shall be
hand-delivered, mailed, transmitted, telecopied or telexed in the manner
described above, or which shall be delivered to a telegraph company, shall be
deemed sufficiently given, served, sent, received or delivered for all purposes
at such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or the answerback being deemed conclusive, but not exclusive,
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
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4.8 TERMINATION
This Agreement shall terminate on the Expiration Date, such that
all rights and obligations hereunder shall cease, and this Agreement shall be of
no further force or effect.
4.9 APPOINTMENT OF REPRESENTATIVE
Linsang hereby appoints Li, with power of substitution, as its
exclusive agent to act on its behalf with respect to any and all actions to be
taken under or amendments or modifications to be made to this Agreement (the
"Representative"). The Representative shall take, and Linsang agrees that the
Representative shall take, any and all actions which the Representative believes
are necessary or advisable under this Agreement for and on behalf of Linsang, as
fully as if Linsang was acting on its own behalf, including, without limitation,
dealing with the Company with respect to all matters arising under this
Agreement, entering into any amendment or modification to this Agreement deemed
advisable by the Representative and taking any and all other actions specified
in or contemplated by this Agreement. The Company shall have the right to rely
upon all actions taken or not taken by the Representative pursuant to this
Agreement, all of which actions or omissions shall be legally binding upon
Linsang.
4.10 PUBLICITY
The Stockholders will use their reasonable best efforts to
consult with the Company prior to issuing any press release, making any filing
with any governmental entity or national securities exchange or making any other
public dissemination of information by the Stockholders within which this
Agreement or the contents hereof are referenced or described.
4.11 EXECUTION IN COUNTERPARTS
To facilitate execution, this Agreement may be executed in as
many counterparts as may be required; and it shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
* * * * *
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IN WITNESS WHEREOF, the undersigned have duly executed and
delivered this Amended and Restated Stockholders' Agreement, or have caused this
Amended and Restated Stockholders' Agreement to be duly executed and delivered
on their behalf, as of the day and year first hereinabove set forth.
McLEODUSA INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ Rings
-------------------------------------
Name: ▇▇▇▇▇▇▇ Rings
Title: Vice President and Secretary
STOCKHOLDERS
LINSANG PARTNERS, LLC
By: /s/ ▇▇▇▇ ▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇
Title: Chairman and Manager
/s/ ▇▇▇▇ ▇▇
-------------------------------------
▇▇▇▇ ▇▇
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