Exhibit 15
Exhibit 2.2B
THIS WARRANT AND ANY SHARES OF COMMON STOCK ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE STATE LAWS. THIS WARRANT HAS
BEEN ACQUIRED BY THE REGISTERED OWNER HEREOF FOR INVESTMENT AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF WITHIN THE
MEANING OF THE 1933 ACT. THIS WARRANT AND ANY SHARES OF COMMON STOCK
ACQUIRED UPON THE EXERCISE OF THIS WARRANT MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE
PROVISIONS OF THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS, OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION
OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
THE SALE, PLEDGE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THIS WARRANT
AND ANY SHARES OF COMMON STOCK ACQUIRED UPON THE EXERCISE OF THIS WARRANT
IS RESTRICTED BY AND SUBJECT TO THE PROVISIONS OF A PURCHASE AGREEMENT
DATED AS OF JANUARY 30, 2002, A COPY OF WHICH IS AVAILABLE UPON REQUEST FOR
INSPECTION AT THE OFFICES OF THE COMPANY. ANY SUCH REQUEST SHOULD BE
ADDRESSED TO THE SECRETARY OF THE COMPANY.
____, 2002 Void After __, 200__
McLEODUSA INCORPORATED
Common Stock Purchase Warrant
McLeodUSA Incorporated, a Delaware corporation (the "Corporation"),
hereby certifies that for value received [ ] ("[ ]"), or its assigns, is
entitled to purchase, subject to the terms and conditions hereinafter set
forth, an aggregate of ____________ ( ) shares (subject to adjustment as
hereinafter provided) of Class A Common Stock, par value $.01 per share
(the "Common Stock"), of the Corporation at a purchase price per share
equal to $[$30 million divided by the number of shares subject to warrant
upon the closing of the Restructuring] (subject to adjustment as set forth
herein, the "Exercise Price"), payable as hereinafter provided.
SECTION 1. Warrant Expiration Date. As used herein, the term "Warrant
Expiration Date" shall mean 5:00 p.m., Eastern Time, on ____________ ___,
200__[insert date which is 5 years from date of issuance]; provided that if
such date shall not be a Business Day (as defined below), then 5:00 p.m.,
Eastern Time, on the next following day which is a Business Day. 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.
SECTION 2. Notice. In case at any time: (a) the Corporation shall pay
any dividend or make any distribution (other than regular cash dividends
from earnings or earned surplus paid at an established rate) to the holders
of its Common Stock; (b) the Corporation shall offer for subscription pro
rata to the holders of its Common Stock any additional shares of stock of
any class or other rights; (c) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation or consolidation
or merger of the Corporation with or sale of all or substantially all of
its assets to another corporation; (d) there shall be a voluntary,
involuntary or deemed dissolution, liquidation or winding-up of the
Corporation; or (e) the Corporation (or any subsidiary thereof) shall
commence a tender offer for all or a portion of the Corporation's
outstanding shares of Common Stock; then, in any one or more of such cases,
the Corporation shall give written notice, by first class mail, postage
prepaid, addressed to the registered holder of this Warrant at the address
of such registered holder as shown on the books of the Corporation of the
date on which (i) the books of the Corporation shall close or a record date
shall be fixed for determining the stockholders entitled to such dividend,
distribution or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up, conversion, redemption or other event shall take place, as the
case may be. Such notice shall also provide reasonable details of the
proposed transaction and specify the date as of which the holders of Common
Stock of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their Common Stock
for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up, conversion, redemption, tender offer or other event, as the
case may be. Such written notice shall be given at least 10 Business Days
prior to the action in question and not less than 10 Business Days prior to
the record date or the date on which the Corporation's transfer books are
closed in respect thereto.
SECTION 3. Exercise.
(a) Manner of Exercise. This Warrant may be exercised at any time or
from time to time on any Business Day, for all or any part of the number of
shares of Common Stock purchasable upon its exercise; provided, however,
that this Warrant shall be void and all rights represented hereby shall
cease unless exercised before the Warrant Expiration Date. In order to
exercise this Warrant, in whole or in part, the holder hereof shall (i)
deliver to the Corporation at its principal place of business, or at such
other office as the Corporation may designate by notice in writing, (A)
this Warrant and (B) a written notice of such holder's election to exercise
this Warrant substantially in the form of Exhibit A attached hereto and
(ii) pay to the Corporation, by cashier's check made payable to the order
of the Corporation or wire transfer of funds to an account designated by
the Corporation, an amount equal to the aggregate purchase price for all
shares of Common Stock as to which this Warrant is exercised.
(b) Issuance of Common Stock. Upon receipt of the documents and
payments or shares described in Section 3(a), the Corporation shall, as
promptly as practicable, and in any event within 10 Business Days
thereafter, execute or cause to be executed, and deliver to such holder a
certificate or certificates representing the aggregate number of full
shares of Common Stock issuable upon such exercise, together with an amount
in cash in lieu of any fraction of a share, as hereinafter provided. The
stock certificate or certificates so delivered shall be in the denomination
specified in said notice and shall be registered in the name of the holder
hereof. This Warrant shall be deemed to have been exercised and a
certificate or certificates for shares of Common Stock shall be deemed to
have been issued, and the holder hereof or any other person so designated
to be named therein shall be deemed to have become a holder of record of
such shares for all purposes as of the date said notice, together with this
Warrant and the documents and payments or shares described in Section 3(a),
is received by the Corporation as aforesaid. If this Warrant shall have
been exercised in part, the Corporation shall, at the time of delivery of
said certificate or certificates, deliver to the holder hereof a new
Warrant evidencing the rights of such holder to purchase the unpurchased
shares of Common Stock called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant. The Corporation shall
pay all expenses and any and all United States federal, state and local
taxes and other charges that may be payable in connection with the
preparation, issue and delivery of stock certificates under this Section 3,
except that the Corporation shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of
the shares of Common Stock issuable upon exercise in a name other than that
of the holder who shall have surrendered the same in exercise of the
subscription right evidenced thereby. The Corporation covenants that all
shares of Common Stock issued upon exercise of this Warrant will, upon
payment of the Exercise Price, be duly authorized and validly issued, fully
paid and nonassessable, free of preemptive rights and, except for any tax
payable by the holder pursuant to the preceding sentence, free from all
taxes, liens, charges and security interests with respect to the issue
thereof. The Corporation shall from time to time use its reasonable best
efforts to take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental
agencies and authorities and securities act filings under federal and state
laws which may be or become required in connection with the issuance, sale,
transfer and delivery of this Warrant, the exercise of this Warrant, and
the issuance, sale, transfer and delivery of the shares of Common Stock
issued upon exercise of this Warrant.
SECTION 4. Reservation of Shares. The Corporation covenants that it
will at all times until the Warrant Expiration Date reserve and keep
available, free of pre-emptive rights, out of its authorized and unissued
Common Stock, solely for the purpose of issue upon exercise of this
Warrant, such number of shares of Common Stock as shall then be issuable
upon the exercise of this Warrant.
SECTION 5. Negotiability. This Warrant is issued upon the following
terms, to all of which each holder or owner hereof by the taking hereof
consents and agrees:
(a) Subject to compliance with federal and applicable state securities
laws and the terms of this Warrant, title to this Warrant may be
transferred by endorsement (by the holder hereof executing the form of
assignment attached hereto as Exhibit B) and delivery in the same manner as
in the case of a negotiable instrument transferable by endorsement and
delivery;
(b) Subject to compliance with federal and applicable state securities
laws and the terms of this Warrant, any person in possession of this
Warrant properly endorsed is authorized to represent himself as absolute
owner hereof and is empowered to transfer absolute title hereto by
endorsement and delivery hereof to a bona fide purchaser hereof for value;
each prior taker or owner waives and renounces all of his equities or
rights in this Warrant in favor of each such bona fide purchaser, and each
such bona fide purchaser shall acquire absolute title hereto and to all
rights represented hereby; and
(c) Until this Warrant is transferred on the books of the Corporation,
the Corporation may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary,
and any transfer in violation of the terms hereof shall be void and of no
effect.
SECTION 6. Loss or Mutilation. Upon receipt of evidence satisfactory
to the Corporation of the loss, theft, destruction or mutilation of this
Warrant (including a reasonably detailed affidavit with respect to the
circumstances of any loss, theft or destruction of such Warrant) and, if
requested in the case of any such loss, theft or destruction, upon delivery
of an indemnity bond or other agreement or security reasonably satisfactory
to the Corporation, or, in the case of any such mutilation, upon surrender
and cancellation of this Warrant, the Corporation at its expense will
execute and deliver, in lieu hereof, a new Warrant of like tenor.
SECTION 7. Consolidation, Merger, etc. If any consolidation or merger
of the Corporation 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 Corporation shall cause lawful
and adequate provision to be made whereby the registered holder of this
Warrant 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 Corporation immediately theretofore receivable upon the
exercise of this Warrant, 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 Corporation immediately
theretofore receivable upon the exercise of this Warrant 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
holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the number of shares
purchasable upon the exercise of this Warrant) 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 Corporation 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 Corporation) resulting from such consolidation or merger or the
corporation or other entity purchasing such assets shall assume by written
instrument executed and mailed to the registered holder of this Warrant, at
the last address of such registered holder appearing on the books of the
Corporation, the obligation to deliver to such registered holder such
shares of stock, securities or property as, in accordance with the
foregoing provisions, such registered holder may be entitled to purchase or
receive.
SECTION 8. Antidilution Protection.
(a) If at any time or from time to time after the date hereof, the
Corporation issues or sells, or is deemed by the express provisions of this
subsection (a) to have issued or sold, any Additional Shares of Common
Stock (as defined in subsection (g) below), other than as a dividend or
other distribution on any class of stock as provided in clause (d) below
and other than a subdivision or combination of shares of Common Stock as
provided in clause (e) below, without consideration or for an Effective
Price (as defined in subsection (g) below) less than the Fair Market Value
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 Section 7 or this Section 8) immediately prior to such
issuance, and (ii) a number of shares of Common Stock calculated by
dividing the consideration received by the Corporation 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 Section 7 and this
Section 8) 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 this Warrant shall be proportionately increased so that the
total amount payable upon exercise in whole of this Warrant shall not be
modified.
(b) For the purpose of making any adjustment required under this
Section 8, the consideration received by the Corporation 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 Corporation before deduction of
any underwriting or similar commissions, compensation or concessions paid
or allowed by the Corporation in connection with such issue or sale and
without deduction of any expenses payable by the Corporation, (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 Corporation, and (iii) if Additional Shares of Common
Stock, Convertible Securities (as defined in subsection (c) below) or
Options (as defined in subsection (c) 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 Corporation
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.
(c) For the purpose of the adjustment required under this Section 8,
if the Corporation 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 Corporation 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 Corporation 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
Corporation upon the exercise of such Options, plus, in the case of
Convertible Securities, the minimum amounts of consideration, if any,
payable to the Corporation (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
Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation upon such exercise, plus the
consideration, if any, actually received by the Corporation 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 Corporation (other than by cancellation of
liabilities or obligations evidenced by such Convertible Securities) on the
conversion, exercise or exchange of such Convertible Securities.
(d) In case the Corporation shall declare a dividend or make any other
distribution upon any stock of the Corporation 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 8(c)), 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 as if the
Corporation had subdivided its outstanding shares of Common Stock into a
greater number of shares as provided in clause (e) of this Section 8.
(e) If the Corporation 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 this Warrant will be proportionately increased and the
Exercise Price will be proportionately decreased, and if the Corporation 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 this Warrant will be
proportionately decreased and the Exercise Price will be proportionately
increased.
(f) Other Distributions. Other than ordinary cash dividends or
distributions paid out of the Corporation's current earnings in amounts
consistent with the Corporation's ordinary practice as in effect from time
to time, which are specifically excluded from the provisions of this clause
(f), in the event the Corporation shall fix a record date for the making of
a dividend or distribution on its Common Stock payable in cash, Common
Stock of the Corporation, securities of other persons, evidences of
indebtedness issued by the Corporation or other persons, assets or warrants
or rights not referred to in clauses (d) or (e) of this Section 8 (the
"Other Distribution"), then, in each such case, at the election of the
Corporation, either (i) the number of shares of Common Stock issuable after
such record date upon exercise of this Warrant shall be adjusted by
multiplying the number of shares of Common Stock issuable upon the exercise
of this 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
Corporation) of the Other Distribution applicable to one share of Common
Stock, or (ii) adequate provision shall be made so that the holder of this
Warrant shall have the right to receive, in addition to shares of Common
Stock upon the exercise of this Warrant, at the election of the
Corporation, either (A) the Other Distribution to which such holder would
have been entitled as a holder of Common Stock if such holder had exercised
this Warrant immediately prior to the record date for such distribution or
(B) the cash equivalent of such Other Distribution.
If the Corporation elects to adjust the number of shares of
Common Stock issuable upon the exercise of this 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 Corporation
entitled to receive such distribution; provided however, that the
Corporation shall deliver to the holder who exercises this Warrant after
any such record date, but prior to the related distribution, a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
distribution upon its occurrence.
Notwithstanding the foregoing, the Corporation 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
Corporation) 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.
(g) "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Corporation or deemed to be issued pursuant to
this Section 8 (whether or not subsequently reacquired or retired by the
Corporation), other than Excluded Stock. "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, or consultants or advisors
to, the Corporation or any subsidiary pursuant to stock purchase or stock
option plans or other 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 hereof,
including, without limitation, the Series F Preferred Stock of the
Corporation; (iii) Common Stock issued in connection with 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 7 or clause (d) or (e) of this Section 8 hereof; 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 Corporation under this Section 8, into
the aggregate consideration received, or deemed to have been received by
the Corporation for such issue under this Section 8, for such Additional
Shares of Common Stock.
(h) No adjustment pursuant to this Section 8 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 of Common Stock
purchasable upon the exercise hereof.
SECTION 9. No Dilution or Impairment. If any event shall occur as to
which the provisions of Section 7 or 8 hereof are not strictly applicable
but the failure to make any adjustment would adversely affect the purchase
rights represented by this Warrant in a way that is contrary to the
manifest and essential intent and principles of Sections 7 and 8 hereof,
then, in each such case, the Board of Directors of the Corporation shall
provide for an adjustment, if applicable, on a basis consistent with the
manifest and essential intent and principles established in Sections 7 and
8 hereof, necessary to preserve, without dilution, the purchase rights
represented by this Warrant.
SECTION 10. Notice of Adjustment. Upon any adjustment or other change
relating to the Exercise Price or the securities purchasable upon the
exercise of this Warrant, then, and in each such case, the Corporation
shall (a) cause to be issued to the Corporation a certificate of a firm of
independent public accountants (who may be the regular accountants employed
by the Corporation) setting forth the Exercise Price and number of shares
of Common Stock issuable upon exercise of the Warrant after such adjustment
and setting forth a statement of the facts requiring such adjustment and
showing in reasonable detail the manner of computing the same and (b)
promptly give written notice thereof, by first class mail, postage prepaid,
addressed to the registered holder of this Warrant at the address of such
registered holder as shown on the books of the Corporation, which notice
shall state the increase or decrease in the number or other denominations
of securities purchasable upon the exercise of this Warrant and a copy of
the certificate referred to in clause (a) above.
SECTION 11. Fractional Shares. If the number of shares of Common Stock
purchasable upon the exercise of this Warrant is adjusted pursuant to
provisions hereof, the Corporation shall nevertheless not be required to
issue fractions of shares, upon exercise of this Warrant or otherwise, or
to distribute certificates that evidence fractional shares. Whether or not
fractional shares are issuable upon exercise of this Warrant shall be
determined on the basis of the total number of shares of Common Stock the
holder is at the time acquiring and the number of shares of Common Stock
issuable upon such aggregate exercise. With respect to any fraction of a
share called for upon any exercise hereof, the Corporation shall pay to the
holder hereof an amount in cash equal to such fraction multiplied by the
current Fair Market Value of one share of Common Stock.
SECTION 12. Information. Each holder of this Warrant, and each holder
of shares of Common Stock acquired upon the exercise of this Warrant, by
acceptance hereof and thereof, agrees to furnish to the Corporation such
information concerning such holder as may be requested by the Corporation
which is necessary in connection with any registration or qualification of
shares of Common Stock purchasable hereunder.
SECTION 13. Warrant Holder Not Deemed Stockholder. The holder of this
Warrant shall not, as such, be entitled to any rights as a stockholder of
the Corporation, except for those conferred pursuant to this Warrant, nor
shall the holder of this Warrant have any liabilities to purchase any
securities hereunder or as a stockholder of the Corporation whether such
liabilities are asserted by the Corporation or by creditors or stockholders
of the Corporation or otherwise.
SECTION 14. Transfer Restrictions. Each Warrant (including each
Warrant issued upon the transfer of any Warrant) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
THIS WARRANT AND ANY SHARES OF COMMON STOCK ACQUIRED UPON THE
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR UNDER ANY
APPLICABLE STATE LAWS. THIS WARRANT HAS BEEN ACQUIRED BY THE
REGISTERED OWNER HEREOF FOR INVESTMENT AND NOT WITH A VIEW TO OR
FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF WITHIN THE
MEANING OF THE 1933 ACT. THIS WARRANT AND ANY SHARES OF COMMON
STOCK ACQUIRED UPON THE EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS
EXEMPT UNDER THE PROVISIONS OF THE 1933 ACT OR ANY APPLICABLE
STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
THE SALE, PLEDGE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF
THIS WARRANT AND ANY SHARES OF COMMON STOCK ACQUIRED UPON THE
EXERCISE OF THIS WARRANT IS RESTRICTED BY AND SUBJECT TO THE
PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF JANUARY 30, 2002,
A COPY OF WHICH IS AVAILABLE UPON REQUEST FOR INSPECTION AT THE
OFFICES OF THE COMPANY. ANY SUCH REQUEST SHOULD BE ADDRESSED TO
THE SECRETARY OF THE COMPANY.
Each certificate for Common Stock issued upon the exercise of any Warrant,
and each certificate issued upon the transfer of any such Common Stock,
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR UNDER ANY APPLICABLE STATE LAWS. THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY THE
REGISTERED OWNER HEREOF FOR INVESTMENT AND NOT WITH A VIEW TO OR
FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF WITHIN THE
MEANING OF THE 1933 ACT. THE SHARES MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT
UNDER THE PROVISIONS OF THE 1933 ACT OR ANY APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
THE SALE, PLEDGE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF
THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND
SUBJECT TO THE PROVISIONS OF A STOCK PURCHASE AGREEMENT DATED AS
OF JANUARY 30, 2002, A COPY OF WHICH IS AVAILABLE UPON REQUEST
FOR INSPECTION AT THE OFFICES OF THE COMPANY. ANY SUCH REQUEST
SHOULD BE ADDRESSED TO THE SECRETARY OF THE COMPANY.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE SHALL BE REDEEMABLE
AS PROVIDED IN THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION.
Subject to the foregoing, the shares of Common Stock issuable upon exercise
of this Warrant are freely transferable at any time.
SECTION 15. Rights of Action; Remedies. All rights of action with
respect to this Warrant are vested in the holder of this Warrant, and the
holder may enforce against the Corporation its right to exercise this
Warrant for the purchase of shares of Common Stock in the manner provided
in this Warrant. The Corporation stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by
the Corporation in the performance of or compliance with any of the terms
of this Warrant are not and will not be adequate, and that such terms may
be specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
SECTION 16. Modification of Warrant. This Warrant shall not be
modified, supplemented or altered in any respect except with the consent in
writing of the holder hereof and the Corporation; and no change in the
number or nature of the securities purchasable upon the exercise of this
Warrant, or the exercise price therefor, or the acceleration of the Warrant
Expiration Date, shall be made without the consent in writing of the holder
hereof, other than such changes as are specifically prescribed by this
Warrant as originally executed.
SECTION 17. Miscellaneous. This Warrant shall be governed by, and
construed and enforced in accordance with, the laws of State of Delaware,
without regard to its principles of conflicts of laws. The headings in this
Warrant are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant is being executed as an
instrument under seal. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision. This Warrant [and list other applicable agreements if any]
embody the entire agreement and understanding between the parties hereto
and supersedes all prior agreements and understandings relating to the
subject matter hereof.
SECTION 18. Descriptive Headings. The headings in this Warrant are for
purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 19. GOVERNING LAW. THIS WARRANT 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.
SECTION 20. 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, located in Delaware, for any Litigation arising out of
or relating to this Warrant and the transactions contemplated hereby and
thereby (and agrees not to commence any proceeding relating hereto or
thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail sent to (i)
the holder of the Warrant, at its last known address appearing on the books
of the Corporation maintained for such purpose or (ii) the Corporation, at
the address listed in its current Securities and Exchange Commission
filings shall be effective service of process for any 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
proceeding arising out of this Warrant or the transactions contemplated
hereby in the courts of the State of Delaware or the United States of
America, located in Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court
that any such proceeding brought in any such court has been brought in an
inconvenient forum.
SECTION 21. WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASERS
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 WARRANT.
SECTION 22. Successors. All the covenants and provisions of this
Warrant shall bind and inure to the benefit of the successors and permitted
transferees of the holder and the successors of the Corporation.
SECTION 23. Exchange Listing. The Corporation will from time to time
take all action that may be necessary so that the shares of Common Stock
issuable upon exercise of this Warrant, 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 Corporation within the time frame required by any such
exchanges, quotation systems or other markets).
SECTION 24. Definitions. For purposes of this Warrant, the following
terms have the following respective meanings:
"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 five (5) 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 five (5) 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.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly
executed as of the date first written above.
McLEODUSA INCORPORATED
By:
Name:
Title:
EXHIBIT A
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EXERCISE FORM
(To be signed only on exercise of Warrant)
McLeodUSA Incorporated
----------------------
----------------------
----------------------
The undersigned hereby irrevocably elects to exercise the right to
purchase represented by the within Warrant for, and to purchase thereunder,
_______ shares of the stock provided for therein, and requests that
certificates for the shares to be issued upon such exercise to be issued in
the name of:
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(Please print name, address and social security number)
and, if said number of shares shall not be all the shares purchasable
thereunder, that a new Warrant for the balance remaining of the shares
purchasable under the within Warrant be registered in the name of the
undersigned holder of the within Warrant or his Assignee as below indicated
and delivered to the address stated below.
NAME OF HOLDER OR ASSIGNEE:
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(Please print)
ADDRESS OF HOLDER
OR ASSIGNEE:
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SIGNATURE OF HOLDER:
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DATED:
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Note: The above signature must correspond with the name exactly as written
upon the face of the within Warrant in every particular, without alteration
or enlargement or any change whatever, unless the within Warrant has been
assigned.
EXHIBIT B
---------
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto _____________________________ the right represented by the
within Warrant to purchase __________________ shares of Common Stock of
McLeodUSA Incorporated to which the within Warrant relates, and appoints
______________________ attorney to transfer such rights on the books of
McLeodUSA Incorporated with full power of substitution in the premises.
NAME OF HOLDER:
----------------------------------------------------------
(Please print)
ADDRESS:
-----------------------------------------------------------------
SIGNATURE OF HOLDER:
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DATED:
------------------
Note: The above signature must correspond with the name exactly as written
upon the face of the within Warrant in every particular, without alteration
or enlargement or any change whatever, unless the within Warrant has been
assigned.
SIGNED IN THE PRESENCE OF:
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