Exhibit 1.1
MCLEODUSA INCORPORATED
9,000,000 Shares
Class A Common Stock
($.01 par value)
Underwriting Agreement
May __, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As Representatives of the several Underwriters
c/o Xxxxxxx Xxxxx Barney Inc.
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The persons identified in Schedule II hereto as selling Underwritten
Securities (as defined below) (the "Selling Stockholders") severally propose to
sell to the underwriters named in Schedule I hereto (the "Underwriters"), for
whom you (the "Representatives") are acting as representatives, an aggregate of
9,000,000 shares of Class A Common Stock, $.01 par value (the "Common Stock") of
McLeodUSA Incorporated, a Delaware corporation (the "Company"), each Selling
Stockholder selling the number of shares of Common Stock set forth opposite such
Selling Stockholders' name in Schedule II hereto in the column entitled "Number
of Shares of Underwritten Securities To Be Sold" (the shares to be so sold by
the Selling Stockholders being hereinafter called the "Underwritten
Securities"). The persons identified in Schedule II hereto as selling Option
Securities (as defined below) (the "Option Selling Stockholders;" the Option
Selling Stockholders, together with the Selling Stockholders, being hereinafter
called the "Selling Stockholders") also propose to grant to the Underwriters an
option to purchase up to 1,350,000 additional shares of Common Stock, as
indicated in Schedule II hereto in the column entitled "Number of Option
Securities To Be Sold" (the "Option Securities"; the Option Securities, together
with the Underwritten Securities, being hereinafter called the "Securities"). To
the extent there are no additional Underwriters listed on Schedule I other than
you, the term Representatives as used herein shall mean you, as Underwriters,
and the terms Representatives and Underwriters shall mean either the singular or
plural as the context requires. In addition, to the extent that there is not
more than one Selling Stockholder named in Schedule II, the term Selling
Stockholder shall mean either the singular or plural. The use of the neuter in
this Agreement shall include the feminine and masculine wherever appropriate.
Any reference herein to the Registration Statement, a Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of such Preliminary Prospectus or the Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement,
or the issue date of any Preliminary Prospectus or the Prospectus, as the case
may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof. The Company acknowledges that it is
entering into this Agreement in order to secure the significant benefits that
come from the distribution of its shares among a broader group of shareholders.
1. Representations and Warranties.
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(a) The Company represents and warrants to, and agrees with, each
Underwriter that:
(i) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(file number 333-76501) on Form S-3, including a related preliminary
prospectus, for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto,
including a related preliminary prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission one
of the following: either (1) prior to the Effective Date of such
registration statement, a further amendment to such registration statement
(including the form of final prospectus), (2) after the Effective Date of
such registration statement, a final prospectus in accordance with Rules
430A and 424(b) or (3) after the Effective Date of such registration
statement, a post-effective amendment to such registration statement
(including a final prospectus). In the case of clause (2), the Company has
included in such registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, such
final prospectus, or such post-effective amendment and final prospectus
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(ii) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing Date
(a "settlement date"), the Prospectus (and any supplements thereto), will
comply in all material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date
of any filing
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pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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however, that the Company makes no representations or warranties
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as to the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter through the Representatives or by or on
behalf of any Selling Stockholders specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
(iii) The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus;
the outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the Securities
are listed on the Nasdaq National Market; and the certificates for the
Securities are in valid and sufficient form.
(iv) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act,
in connection with the offering of the Securities.
(v) The documents filed by the Company under the Exchange Act at the
time they were filed with the Commission, complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the thereunder and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein, in light of
the circumstances under which they were made, or necessary to make the
statements therein not misleading; and any further documents so filed, when
such documents are filed with the Commission, will conform in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein, in light of the circumstances under which they were made, or
necessary to make the statements therein not misleading.
(vi) Since the date of the most recent financial statements included
or incorporated by reference in the Prospectus (exclusive of any supplement
thereto), there has been no material adverse change, or any development
which could reasonably be expected to result in a material adverse change,
in the condition (financial or other), earnings, business, prospects or
properties of the Company and its subsidiaries, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or incorporated by reference in the Prospectus (exclusive of any
supplement thereto); and, since the respective dates as of which
information is given or incorporated by reference in the Prospectus, there
has not been any change in the capital stock (other than grants of options
and issuances of common stock in connection with the Company's acquisitions
of Talking Directories, Inc.,
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InfoAmerica Phone Books, Inc., Dakota Telecommunications Group, Inc. and
Ovation Communications, Inc. or pursuant to existing employee stock option
plans, 401(k) plans, stock ownership plans or stock purchase plans,
repurchases by the Company of its common stock in the ordinary course of
business or conversions of outstanding convertible securities) of the
Company or any of its subsidiaries or long-term debt (other than the
issuance of $500 million aggregate principal amount of the Company's 8 1/8%
senior notes due 2009 in February 1999, changes in connection with the
Company's acquisitions of Talking Directories, Inc., Info America Phone
Books, Inc., Dakota Telecommunications Group, Inc. and Ovation
Communications, Inc., changes as a result of borrowings of the Company or
any of its subsidiaries in the ordinary course of business not exceeding
$12,000,000, maturities, regularly scheduled payments or currency
fluctuations) of the Company or any of its subsidiaries.
(vii) Each of (a) the Company, and (b) McLeodUSA Telecommunications
Services, Inc., McLeodUSA Network Services, Inc., McLeodUSA Publishing
Company, McLeodUSA Media Group, Inc., McLeodUSA Diversified, Inc., Xxxxxxx,
Xxxx & Associates, Inc., Consolidated Communications Inc., Illinois
Consolidated Telephone Company, Consolidated Communications Directories,
Inc., Talking Directories, Inc., Ovation Communications, Inc., Ovation
Communications of Minnesota, Inc., BRE Communications L.L.C. and Dakota
Telecommunications Group, Inc. (individually a "Subsidiary" and
collectively the "Subsidiaries") has been duly incorporated or organized
and is validly existing as a corporation or, as applicable, limited
liability company in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate or organizational
power and authority to own its properties and conduct its business as
described in or incorporated by reference in the Prospectus, and is duly
qualified to do business as a foreign corporation or, as applicable,
limited liability company and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to
be so qualified could not reasonably be expected to have a material adverse
effect on the Company and the Subsidiaries. Except for the Subsidiaries,
the Company has no subsidiaries which, considered in the aggregate as a
single subsidiary, would constitute a "significant subsidiary" as defined
in Rule 1-02(w) of Regulation S-X promulgated under the Act.
(viii) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth or incorporated by
reference in the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company, either directly or through wholly
owned subsidiaries, free and clear of any security interests, claims or
liens.
(ix) Except as disclosed or incorporated by reference in the
Prospectus, there is no pending or, to the Company's knowledge, threatened
action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries which, if finally determined adversely to the Company or any
of its subsidiaries, would have a material adverse effect on the condition
(financial or other), earnings, business, prospects or properties of the
Company and its subsidiaries; and the statements in or incorporated by
reference in the Prospectus, under the headings "Risk Factors - Our
Dependence on Regional Xxxx Operating Companies to Provide Most of Our
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Communications Services Could Make it Harder for Us to Offer Our Services
at a Profit," "Risk Factors - Actions by US WEST May Make it More Difficult
for Us to Offer Our Communications Services," and "Business - Legal
Proceedings" fairly summarize the actions, suits and proceedings therein
described except for such changes with respect to such actions, suits and
proceedings which could not have a material adverse effect on the Company
and the statements in or incorporated by reference in the Prospectus
concerning stockholders' agreements to which the Company is a party fairly
summarize the franchises, contracts or other documents therein described
except for such changes with respect to such franchises, contracts or other
documents which could not have a material adverse effect on the Company.
(x) This Agreement has been duly authorized, executed and delivered by
the Company.
(xi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company
of the transactions contemplated herein, except for the declaration of
effectiveness of the Registration Statement and except such as may be
required under all applicable state securities and blue sky laws of any
jurisdiction and such other approvals as have been obtained.
(xii) Neither the sale of the Securities, nor the consummation of any
other of the transactions herein contemplated, nor the fulfillment of the
terms hereof, in each case by the Company, will conflict with, result in a
breach or violation of, or constitute a default under the charter or by-
laws of the Company or the terms of any indenture or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or
bound or (assuming compliance with all applicable state securities and blue
sky laws and that the Registration Statement has been declared effective
and, if required, that the Prospectus has been filed pursuant to Rule
424(b) any law, rule or regulation applicable to the Company or any of the
Subsidiaries or any judgement, order or decree applicable to the Company or
any of its Subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Company or any of its Subsidiaries.
(xiii) Except as set forth in or incorporated by reference in the
Prospectus, no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement that have
not been duly waived.
(xiv) Xxxxxx Xxxxxxxx LLP, who have reported upon the audited
financial statements incorporated by reference in the Prospectus, are
independent public accountants within the meaning of the Act and the rules
and regulations of the Commission thereunder.
(xv) The consolidated financial statements of the Company and of
certain Subsidiaries included or incorporated by reference in the
Prospectus, present fairly the financial position of the Company and its
subsidiaries and such Subsidiaries as of the dates indicated and the
consolidated results of the operations and cash flows of the Company and
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its subsidiaries and such Subsidiaries for the periods specified. Such
financial statements (except as disclosed in the notes thereto or otherwise
stated therein) have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire
period involved. The financial statement schedules, if any, included or
incorporated by reference in the Prospectus, present fairly the information
stated therein. The selected financial data included or incorporated by
reference in the Prospectus present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
consolidated financial statements included or incorporated by reference in
the Prospectus. The pro forma financial statements and other pro forma
financial information included or incorporated by reference in the
Prospectus present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(xvi) Neither the Company nor any of the Subsidiaries is in violation
of its charter or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture or
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of the
Subsidiaries is subject, other than defaults (considered in the aggregate)
which could not reasonably be expected to have a material adverse effect on
the condition (financial or other), earnings, business, prospects or
properties of the Company and its subsidiaries.
(xvii) The Company and the Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them and are in compliance in all material
respects with all such certificates, authorities and permits. Neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit, other than any such revocation or modification that
could not reasonably be expected to, singly or in the aggregate, have a
material adverse effect on the condition (financial or other), earnings,
business, prospects or properties of the Company and its subsidiaries.
(xviii) The Company and its subsidiaries have timely filed all United
States federal income tax returns and all other material tax returns which
are required to be filed by them and have paid all taxes due and payable
(other than taxes, the payment of which are being contested in good faith),
and no tax liens have been filed and no claims are being asserted with
respect to any such taxes, which could reasonably be expected to have a
material adverse effect on the condition (financial or other), earnings,
business, prospects or properties of the Company and its subsidiaries. The
provisions for taxes on the books of the Company are adequate in all
material respects for all open years and for its current fiscal period.
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(xix) The Company and the Subsidiaries (A) are in compliance with all
applicable federal, state, local and foreign and other laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) have received all permits, licenses and other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (C) are in compliance with all terms and
conditions of any such permit, license and approval, except, in each case,
where such noncompliance with Environmental Law, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals could not
reasonably be expected, singly or in the aggregate, to have a material
adverse effect on the condition (financial or other), earnings, business,
prospects or properties of the Company and its subsidiaries.
(xx) The Company and the Subsidiaries have good and marketable title
to all real property and good and valid title to all personal property
owned by them, in each case free and clear of all liens, encumbrances and
defects, and any real property and buildings held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases, except, in each case, for such exceptions as are set
forth or incorporated by reference in the Prospectus or which could not
reasonably be expected to have a material adverse effect on the condition
(financial or other), earnings, business, prospects or properties of the
Company and its subsidiaries.
(xxi) The Company and its subsidiaries own and possess all right,
title and interest in and to, or have duly licensed from third parties a
valid, enforceable right to use, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names currently
employed by the Company and its subsidiaries in connection with the
business conducted by them (collectively, "Patent and Proprietary Rights")
and neither the Company nor any of its subsidiaries has received notice of
infringement or misappropriation of or conflict with asserted rights of
others with respect to any Patent and Proprietary Rights, or of any facts
which would render any Patent and Proprietary Rights invalid or inadequate
to protect the interest of the Company or of its subsidiaries therein, and
which infringement, misappropriation or conflict or invalidity or
inadequacy, individually or in the aggregate, could reasonably be expected
to result in a material adverse effect on the condition (financial or
other), earnings, business, prospects or properties of the Company and its
subsidiaries.
(xxii) The Company has complied with all provisions of Section 1 of
Laws of Florida, Chapter 92-198 Securities-Business with Cuba.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
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(b) Each Selling Stockholder represents and warrants to, and agrees with,
each Underwriter that:
(i) Such Selling Stockholder is the lawful owner of the Securities to
be sold by such Selling Stockholder hereunder and upon sale and delivery
of, and payment for, such Securities, as provided herein, such Selling
Stockholder will convey good and marketable title to such Securities, free
and clear of all liens, encumbrances, equities and claims whatsoever.
(ii) Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in this Section 1
are not true and correct and has no knowledge of any material fact,
condition or information not disclosed in or incorporated by reference in
the Prospectus or any supplement thereto which has adversely affected or
could reasonably be expected to materially adversely affect the business of
the Company and its subsidiaries; provided, that the Underwriters
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acknowledge that the foregoing representations insofar as made by MHC
Investment Company, the Xxxxxxx family trusts, Xxxxx X. Xxxxxxx, Xxxx X.
Xxxxxxxx, The Xxxxxx Family Limited Partnership, Xxxxx X. Xxxx, Xxxxxx X.
Xxxxxxxx and Xxxxx X. Xxxxx are based primarily on the Company's
representations to such effect, and are made without independent
investigation by MHC Investment Company, the Xxxxxxx family trusts, Xxxxx
X. Xxxxxxx, Xxxx X. Xxxxxxxx, The Xxxxxx Family Limited Partnership, Xxxxx
X. Xxxx, Xxxxxx X. Xxxxxxxx or Xxxxx X. Xxxxx; and the sale of Securities
by such Selling Stockholder pursuant hereto is not prompted by any
information concerning the Company or any of its subsidiaries which is not
set forth in or incorporated by reference in the Prospectus or any
supplement thereto. For purposes of this Agreement, knowledge of a trust
that is a Selling Stockholder only includes knowledge of the trustee and
not any knowledge attributable to such trustee through such trustee's
membership in a law firm.
(iii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result, under the Exchange
Act, or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(iv) Certificates in negotiable form for such Selling Stockholder's
Securities have been placed in custody, for delivery pursuant to the terms
of this Agreement, under a Custody Agreement and Power of Attorney duly
executed and delivered by such Selling Stockholders, in the form heretofore
furnished to you (the "Custody Agreement") with Norwest Bank Minnesota,
N.A., as Custodian (the "Custodian"); the Securities represented by the
certificates so held in custody for such Selling Stockholder are subject to
the interests hereunder of the Underwriters, the Company and the other
Selling Stockholders, the arrangements for custody and delivery of such
certificates, made by such Selling Stockholder hereunder and under the
Custody Agreement, are not subject to termination by any acts of such
Selling Stockholder, or by operation of law, whether by the death or
incapacity of such Selling Stockholder or the occurrence of any other
event; and if any such death, incapacity or any other such event shall
occur before the delivery of such Securities hereunder, certificates for
the Securities will be delivered by the Custodian in accordance with the
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terms and conditions of this Agreement and the Custody Agreement as if such
death, incapacity or other event had not occurred, regardless of whether or
not the Custodian shall have received notice of such death, incapacity or
other event.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except such as
may have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other approvals
as have been obtained.
(vi) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by such Selling Stockholder or the fulfillment of the terms
hereof by such Selling Stockholder will conflict with, result in a breach
or violation of, or constitute a default under any law or the charter or
by-laws of such Selling Stockholder or the terms of any indenture or other
agreement or instrument to which such Selling Stockholder or any of its
subsidiaries is a party or bound, or any judgement, order or decree
applicable to such Selling Stockholder or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Stockholder or any of its
subsidiaries.
In respect of any statements in or omissions from the Registration Statement or
the Prospectus or any supplements thereto made in reliance upon and in
conformity with information furnished in writing to the Company by any Selling
Stockholder specifically for inclusion in the Registration Statement or
Prospectus (or any amendment or supplement thereto), such Selling Stockholder
hereby makes the same representations and warranties to each Underwriter as the
Company makes to such Underwriter under paragraph (a)(ii) of this Section. The
Company and each Underwriter acknowledges that the information set forth with
respect to each Selling Stockholder under the heading "Principal and Selling
Stockholders" and the statements regarding the Selling Stockholders' portion of
the total expenses of the offering under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectus constitutes the only information
furnished in writing by or on behalf of such Selling Stockholder for inclusion
in any Preliminary Prospectus or the Prospectus.
Any certificate signed by any Selling Stockholder and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by such Selling
Stockholder, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth: each Selling
Stockholder agrees, severally and not jointly, to sell to the Underwriters the
number of shares of Underwritten Securities set forth in Schedule II opposite
the name of such Selling Stockholder, and each Underwriter agrees, severally and
not jointly, to purchase from such Selling Stockholder, at a purchase price of
$____ per share (the "Purchase Price"),that proportion of the number of shares
of Underwritten Securities set forth
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in Schedule II opposite the name of such Selling Stockholder which the number of
shares of Underwritten Securities set forth in Schedule I opposite the name of
such Underwriter bears to the total number of Underwritten Securities, subject,
in each case, to adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Option Selling Stockholders
hereby grant an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of 1,350,000 shares of Option Securities, with
each Option Selling Stockholder granting an option to purchase up to the number
of shares of Option Securities set forth in Schedule II opposite the name of
such Option Selling Stockholder, at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in
part at any time (but not more than once) on or before the 30th day after the
date of the Prospectus upon written or telegraphic notice by the Representatives
to the Company and such Option Selling Stockholders (or their attorney) setting
forth the aggregate number of shares of the Option Securities as to which the
several Underwriters are exercising the option and the settlement date. In the
event that the Underwriters exercise less than their full over-allotment option,
the number of Option Securities to be sold by each Option Selling Stockholder
shall be, as nearly as practicable, in the same proportion to the total number
of Option Securities to be sold as the number of Option Securities set forth in
Schedule II opposite the name of such Option Selling Stockholder bears to the
total number of Option Securities. The number of shares of the Option
Securities to be purchased by each Underwriter shall be the same percentage of
the total number of shares of the Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as the Representatives in their absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
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Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third business day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on May __,
1999, which date and time may be postponed by agreement among the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the
respective aggregate purchase prices of the Securities being sold by the Selling
Stockholders to or upon the order of the Selling Stockholders by wire transfer
payable in same day funds to an account or accounts specified by the Selling
Stockholders. Delivery of the Securities shall be made at such location in New
York, New York as Xxxxxxx Xxxxx Xxxxxx Inc. shall reasonably designate at least
one business day in advance of the Closing Date and payment for such Securities
shall be made at the offices of Xxxxx & Xxxxxxx L.L.P., 000 Xxxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000. Certificates for the Securities shall be
registered in such names and in such denominations as Xxxxxxx Xxxxx Barney Inc.
may request not less than two business days in advance of the Closing Date.
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The Selling Stockholders agree to have the certificates for the Securities
available for inspection, checking and packaging by the Representatives in New
York, New York, not later than 1:00 PM on the business day prior to the Closing
Date.
Each Selling Stockholder will pay all applicable state transfer taxes, if
any, involved in the transfer to the several Underwriters of the Securities to
be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after the
third business day prior to the Closing Date, the Option Selling Stockholders
will deliver to the Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, xx the date specified by the Representatives (which shall be within three
business days after exercise of said option), certificates for the Option
Securities in such names and denominations as the Representatives shall have
requested at least two business days in advance of the settlement date against
payment of the purchase price thereof to or upon the order of the Option Selling
Stockholders by wire transfer payable in same day funds to an account specified
by the Option Selling Stockholders at least one business day in advance of the
settlement date. The Option Selling Stockholders agree to have the certificates
for the Option Securities available for inspection, checking and packaging by
the Representatives in New York, New York, not later than 1:00 p.m. on the
business day prior to the settlement date. If settlement for the Option
Securities occurs after the Closing Date, the Company and such Option Selling
Stockholders will deliver to the Representatives on the settlement date for the
Option Securities, and the obligation of the Underwriters to purchase the Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
----------
(a) The Company agrees with the several Underwriters that:
(i) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b),
the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to
11
the Representatives of such timely filing. The Company will promptly advise
the Representatives (A) when the Registration Statement, if not effective
at the Execution Time, and any amendment thereto, shall have become
effective, (B) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b) or
when any Rule 462(b) Registration Statement shall have been filed with the
Commission, (C) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (D) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any 462(b)
Registration Statement or supplement to the Prospectus or for any
additional information with respect to the Registration Statement or the
Prospectus, (E) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (F) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Company
promptly will (1) notify the Representatives of such event, (2) prepare and
file with the Commission, subject to the second sentence of paragraph (a)
(i) of this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (3) supply any
supplemented Prospectus to you in such quantities as you may reasonably
request.
(iii) As soon as reasonably practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries which
will satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(iv) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(v) The Company will cooperate with the Representatives and counsel
for the Underwriters to register or qualify the Securities for sale under
the laws of such jurisdictions
12
as the Representatives may designate, will maintain such registrations or
qualifications in effect so long as required for the distribution of the
Securities and will pay the fee of the National Association of Securities
Dealers, Inc. in connection with its review of the offering; provided,
--------
however, that in no event shall the Company be obligated to register or
-------
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to general service of process in
suits in any jurisdiction where it is not now so subject.
(vi) Unless this Agreement shall be terminated prior to the Closing
Date, the Company will not, without the prior written consent of Xxxxxxx
Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge, or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act,
any other shares of Common Stock or any securities convertible into, or
exercisable, or exchangeable for, shares of Common Stock; or publicly
announce an intention to effect any such transaction, for a period of 90
days after the date of this Agreement, provided, however, that the Company
-------- -------
may (A) issue and sell Common Stock or securities convertible into or
exchangeable or exercisable for or repayable with Common Stock in
connection with acquisitions or any employee or director benefit or stock
purchase or stock option plans, (B) grant or award Common Stock, options to
purchase Common Stock, or other securities convertible into or exchangeable
for or repayable with Common Stock, in connection with acquisitions or
under such plans, as such plans are in effect at the Execution Time, (C)
issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time or issued, sold,
granted or awarded pursuant to this proviso, and (D) take any other actions
necessary in connection with any of the foregoing in order to register such
securities or Common Stock with the Commission under the Act.
(vii) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(b) Each Selling Stockholder agrees with the several Underwriters that:
(i) Unless this Agreement shall be terminated prior to the Closing
Date, each such Selling Stockholder (other then MHC Investment Company)
will not, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc.,
offer, sell, contract to sell, pledge or otherwise dispose of, (or enter
into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by such Selling
Stockholder or any affiliate of such Selling Stockholder or any person in
privity with such Selling Stockholder or any affiliate of such Selling
Stockholder) directly or indirectly, or participate in the filing of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
13
equivalent position within the meaning of Section 16 of the Exchange Act
with respect to, any shares of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for such Common
Stock, or publicly announce an intention to effect any such transaction of,
any shares of Common Stock beneficially owned by such Selling Stockholder,
or any securities convertible into, or exchangeable for, shares of Common
Stock, for a period of 90 days after the date of this Agreement, other than
shares of Common Stock disposed of as bona fide gifts or pledges or private
sales by a trust to a settlor of such trust where the recipients of such
gifts or the pledgees or settlor, as the case may be, agree in writing with
the Underwriters to be bound by the terms of this paragraph. The foregoing
sentence shall not apply to the Securities to be sold by such Selling
Stockholder under this Agreement.
(ii) Such Selling Stockholder will not take any action designed to or
which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(iii) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as delivery
of a prospectus relating to the Securities by an underwriter or dealer may
be required under the Act, of (a) any material change in the Company's
condition (financial or otherwise), prospects, earnings, business or
properties which comes to the attention of such Selling Stockholder,
without requiring any independent investigation by such Selling
Stockholder, (b) any change in information in the Registration Statement or
the Prospectus relating to such Selling Stockholder or (c) any new material
information relating to the Company or relating to any matter stated in the
Prospectus which comes to the attention of such Selling Stockholder,
without requiring any independent investigation by such Selling
Stockholder.
6. Conditions to the Obligations of the Underwriters. The obligations of
-------------------------------------------------
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any
14
supplement thereto, is required pursuant to Rule 424(b), the Prospectus,
and any such supplement, will be filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Representatives the
opinion of counsel for the Company, dated the Closing Date, substantially
in the form of Exhibit A.
(c) The Company shall have furnished to the Purchasers the opinion of
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, special counsel to the Company on
regulatory matters, dated the Closing Date, to the effect that:
(i) the statements in or incorporated by reference in the
Prospectus under the headings "Risk Factors - Competition in the
Communications Services Industry Could Cause Us to Lose Customers and
Revenue and Could Make it More Difficult for Us to Enter New Markets,"
"Risk Factors - We May Not Succeed in Developing or Making a Profit
from Wireless Services," "Risk Factors - Competition in the Wireless
Telecommunications Industry Could Make it Harder for Us to
Successfully Offer Wireless Services," "Risk Factors - Government
Regulation May Increase Our Cost of Providing Services, Slow Our
Expansion into New Markets and Subject Our Services to Additional
Competitive Pressures," "Business - Market Potential," "Business -
Expansion of Services Using Our Own Communications Network
Facilities," "Business - Proposed Wireless Services," "Business -
Competition" and "Business - Regulation" fairly and accurately
summarize the laws, case law, rules, regulations and orders of the
Federal Communications Commission ("FCC") and the comparable state
regulatory agencies or bodies with direct regulatory jurisdiction over
telecommunications matters in the states in which the Company and any
of the Subsidiaries provide intrastate services (the "State Regulatory
Agencies") except for such changes with respect to such laws, case
law, rules, regulations and orders which could not have a material
adverse effect on the Company and, to the best knowledge of such
counsel, the statements in or incorporated by reference in the
Prospectus under the headings "Risk Factors - Our Dependence on
Regional Xxxx Operating Companies to Provide Most of Our
Communications Services Could Make it Harder for Us to Offer Our
Services at a Profit," "Risk Factors - Actions by US WEST May Make it
More Difficult for Us to Offer Our Communications Services" and
"Business - Legal Proceedings" fairly and accurately summarize the
legal proceedings set forth therein with respect to US WEST
Communications, Inc. except for such changes with respect to such
legal proceedings and action which could not have a material adverse
effect on the Company;
(ii) the Company and the Subsidiaries possess all material
certificates, authorities and permits required by the FCC and State
Regulatory Agencies for the provision of the telecommunications
services currently provided by the Company and the Subsidiaries,
except where the failure to possess such certificates, authorities or
15
permits could not reasonably be expected to have a material adverse
effect on the Company and its subsidiaries; and the Company and the
Subsidiaries are in compliance in all material respects with such
certificates, authorities and permits;
(iii) to the best knowledge of such counsel, neither the Company
nor any of the Subsidiaries is subject to any pending or threatened
action, suit or proceeding before the FCC or any State Regulatory
Agency or (with respect to federal or state telecommunications laws)
any court which could reasonably be expected to have a material
adverse effect on the Company and its subsidiaries, except as
disclosed in or incorporated by reference in the Prospectus;
(iv) no consent, approval, authorization or order of the FCC or
any State Regulatory Agency is required for the sale of the Securities
or the consummation of the transactions contemplated hereby; and
(v) neither the sale of the Securities nor the consummation of
the transactions contemplated hereby will result in a breach or
violation of any law, rule, regulation, judgment, order or decree of
the FCC or any State Regulatory Agency applicable to the Company or
any of the Subsidiaries.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent they deem proper and reasonable, on certificates of public
officials and responsible officers of the Company, including certificates
that define the scope of the telecommunications services provided by the
Company and the Subsidiaries.
(d) The Selling Stockholders shall have furnished to the
Representatives the opinion of Xxxxxxxxxxxx & Xxxxxxxxx P.C. for certain
Selling Stockholders, Xxxxxx Xxxxxx & Xxxxx for the Xxxxxxx family trusts,
Xxxx Xxxxxxxx, Assistant General Counsel of MidAmerican Energy Holdings
Company for MHC Investment Company and Xxxxxxx & Xxxxxx, LLP for
Media/Communications Partners III Limited Partnership and M/C Investors
L.L.C., dated the Closing Date, to the effect that:
(i) this Agreement and the Custody Agreement have been duly
executed and delivered by the Selling Stockholders, the Custody
Agreement is valid and binding on the Selling Stockholders and each
Selling Stockholder has full legal right and authority to sell,
transfer and deliver in the manner provided in this Agreement and the
Custody Agreement the Securities being sold by such Selling
Stockholder hereunder;
(ii) the delivery by each Selling Stockholder to the several
Underwriters of certificates for the Securities being sold hereunder
by such Selling Stockholder against payment therefor as provided
herein, will pass good title to such Securities to the several
Underwriters, free and clear of all liens, encumbrances, equities and
claims whatsoever;
16
(iii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by any
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained; and
(iv) neither the sale of the Securities being sold by any Selling
Stockholder nor the consummation of any other of the transactions
herein contemplated by any Selling Stockholder or the fulfillment of
the terms hereof by any Selling Stockholder will conflict with, result
in a breach or violation of, or constitute a default under any law or
the charter or by-laws of the Selling Stockholder or the terms of any
indenture or other agreement or instrument known to such counsel and
to which any Selling Stockholder or any of its subsidiaries is a party
or bound, or any judgement, order or decree known to such counsel to
be applicable to any Selling Stockholder or any of its subsidiaries of
any court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over any Selling Stockholder or any
of its subsidiaries.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent they deem proper and reasonable, on certificates of the Selling
Stockholders and public officials.
(e) The Representatives shall have received from Xxxxx, Xxxxx & Xxxxx,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the
Company and the Selling Stockholders shall have furnished to such counsel
such documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied in all material respects with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
17
(ii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplement
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and
(iii) since the date of the most recent audited financial
statements included or incorporated by reference in the Prospectus
(exclusive of any supplement thereto), there has been no material
adverse change in the condition (financial or other), earnings,
business, prospects or properties of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(g) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by or on behalf of such Selling
Stockholder, dated the Closing Date, to the effect that the signer of such
certificate has reviewed the Prospectus, any supplement to the Prospectus
and this Agreement and that the representations and warranties of such
Selling Stockholder in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made on
the Closing Date.
(h) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx LLP
shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules, if any, included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them, as applicable, comply in form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and the Audit and Compensation
Committee of the Company and the Subsidiaries; and inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as to
18
transactions and events subsequent to December 31, 1998, nothing came
to their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply in form in all material respects with
applicable accounting requirements of the Act and with the
published rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included
in the Registration Statement and the Prospectus; or
(2) with respect to the period subsequent to December 31,
1998, there were any changes, at a specified date not more than
five business days prior to the date of the letter, in the long-
term debt of the Company and its subsidiaries or capital stock of
the Company or decreases in the stockholders' equity of the
Company and its subsidiaries as compared with the amounts shown
on the December 31, 1998 consolidated balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus, or for the period from January 1, 1999 to such
specified date as compared with the corresponding period in the
preceding year, there were any decreases in revenue or increases
in operating loss or net loss of the Company and its
subsidiaries, except in all instances for such changes, decreases
or increases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives;
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in or incorporated by reference in the Registration Statement
and the Prospectus, including the information set forth under the
captions "Selected Consolidated Financial Data", "Pro Forma Financial
Data" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in or incorporated by reference in the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registrations Statement and the Prospectus (the "pro forma financial
statements"); carrying out certain specified
19
procedures; inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the pro
forma financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (h) includes any
supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change, decrease or increase
specified in the letter or letters referred to in paragraph (h) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), earnings,
business, prospects or properties of the Company and its subsidiaries taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(j) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit B hereto from
each director and officer of the Company and each Selling Stockholder
except for MHC Investment Company, addressed to the Representatives, in
which each such person or entity agrees not to offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, or
participate in the filing of a registration statement with the Commission
in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act with respect to, any shares of Common Stock
of the Company or any securities convertible into or exercisable or
exchangeable for such Common Stock, or publicly announce an intention to
effect any such transaction of any shares of Common Stock beneficially
owned by such person or entity or any securities convertible into, or
exchangeable for, shares of Common Stock for a period of 90 days following
the Execution Time without the prior written consent of Xxxxxxx Xxxxx
Barney Inc., except in the case of each of such persons and entities,
shares of Common Stock disposed of as bona fide gifts or pledges or private
sales by a trust to a settlor of such trust where the recipients of such
gifts or the pledgees or settlor, as the case may be, agree in writing with
the Underwriters to be bound by the terms of this paragraph (j).
20
(k) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company and each Selling Stockholder in
writing or by telephone confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the office of Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000 Xxxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, XX 00000, counsel for the Company, at 9:00 a.m., on the
Closing Date.
7 Reimbursement of Underwriters' Expenses. If the sale of the Securities
---------------------------------------
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or any Selling Stockholder to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through Xxxxxxx Xxxxx Barney Inc. upon demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. If the Company is required to
make any payments to the Underwriters under this Section 7 because of any
Selling Stockholder's refusal, inability or failure to satisfy any condition to
the obligations of the Underwriters set forth in Section 6, then such Selling
Stockholder shall reimburse the Company on demand for all amounts so paid.
8 Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
-------- -------
Company will not be liable in any such case to the extent that any such loss,
claim, damage or
21
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives or by or on behalf of any
Selling Stockholder specifically for inclusion therein; and provided, further,
-------- -------
that the foregoing indemnity agreement with respect to any Preliminary
Prospectus or Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting or causing any such losses, claims, damages or
liabilities purchased Securities (or to the benefit of any person controlling
such Underwriter or any directors, officers, employees and agents of each
Underwriter), if a copy of the Prospectus (or the Prospectus as amended or
supplemented), if the Company shall have timely furnished the Underwriters with
sufficient copies thereof, was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Securities to such person
and if the Prospectus (or the Prospectus as amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Selling Stockholder severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls the Company or any
Underwriter within the meaning of either the Act or the Exchange Act and each
other Selling Stockholder to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to information furnished in
writing to the Company by or on behalf of such Selling Stockholder specifically
for inclusion in the documents referred to in the foregoing indemnity. The
Company and each Underwriter acknowledges that the information set forth
with respect to each Selling Stockholder under the heading "Principal and
Selling Stockholders" and the statements regarding the Selling Stockholders'
portion of the total expenses of the offering under the heading "Underwriting"
in any Preliminary Prospectus and the Prospectus constitutes the only
information furnished in writing by or on behalf of such Selling Stockholder for
inclusion in any Preliminary Prospectus or the Prospectus; and provided,
--------
further, that the foregoing indemnity agreement with respect to any Preliminary
-------
Prospectus or Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting or causing any such losses, claims, damages or
liabilities purchased Securities (or to the benefit of any person controlling
such Underwriter or any directors, officers, trustees, employees and agents of
each Underwriter), if a copy of the Prospectus (or the Prospectus as amended or
supplemented), if the Company shall have timely furnished the Underwriters with
sufficient copies thereof, was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Securities to such person
and if the Prospectus (or the Prospectus as amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability. This
indemnity agreement will be in addition to any liability which each Selling
Stockholder may otherwise have.
22
(c) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Stockholder and
their directors, officers, employees and agents, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished in writing to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company and each Selling Stockholder
acknowledge that the statements regarding delivery set forth in the last
paragraph of the cover page and under the heading "Underwriting," the list of
Underwriters and their respective participation in the sale of the Securities,
the sentences related to concessions and reallowances and the paragraph related
to stabilization, syndicate covering transactions and penalty bids in any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus, and you, as the
Representatives, confirm that such statements are correct.
(d) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b) or (c) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
-------- -------
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
23
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b) or (c)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason in respect of any and all losses, claims,
damages or liabilities (or actions in respect thereof), the relevant
indemnifying party agrees to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company, the Selling
Stockholders and the Underwriters, as applicable, from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as
-------- -------
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company, the Selling Stockholders
and the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits of the Company, the Selling Stockholders
and the Underwriters, as applicable, but also the relative fault of the Company,
of the Selling Stockholders and of the Underwriters in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Selling Stockholders
shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by each of them, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Prospectus;
provided that, for purposes of the contribution provisions contained in this
Section 8(e), any benefits received by the Selling Stockholders shall be deemed
to have been received by the Company if the Company is an indemnifying party.
Relative fault shall be determined by reference to whether any alleged untrue
statement of a material fact or the omission or alleged omission of a material
fact relates to information provided by the Company, the Selling Stockholders on
the or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (e), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
director of the Company and each officer who shall have signed the Registration
Statement shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (e).
24
9 Default by an Underwriter. If any one or more Underwriters shall fail
-------------------------
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Underwritten
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Underwritten Securities set forth opposite the names of all
the remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
-------- -------
that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Underwritten Securities set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of such Securities, and if such nondefaulting
Underwriters do not purchase all such Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Selling Stockholders or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company, the Selling Stockholders and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10 Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if prior to such time (i) trading
in the Company's Common Stock shall have been suspended by the Commission or the
Nasdaq National Market or trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market shall have been suspended or limited or
minimum prices shall have been established on either of such Exchange or Market,
(ii) a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the judgment of the Representatives, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11 Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
25
12 Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or sent by facsimile transmission and confirmed to Xxxxxxx Xxxxx
Xxxxxx Inc., General Counsel (fax no.: (000) 000-0000) and confirmed to the
General Counsel, Xxxxxxx Xxxxx Barney Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000; or, if sent to the Company, will be mailed, delivered or sent
by facsimile transmission and confirmed to it at McLeodUSA Incorporated,
McLeodUSA Technology Park, 0000 X Xxxxxx XX, X.X. Xxx 0000, Xxxxx Xxxxxx, Xxxx
00000, attention of the legal department; or if sent to the Selling
Stockholders, will be mailed, delivered or sent by facsimile transmission and
confirmed to them at the addresses set forth on Schedule II hereto.
13 Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14 Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York.
15 Counterparts. This Agreement may be signed in one or more
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16 Headings. The section headings used herein are for convenience only
--------
and shall not affect the construction hereof.
17 Definitions. The terms which follow, when used in this Agreement,
-----------
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
26
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a)(i) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a)(i) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
MCLEODUSA INCORPORATED
By:
-----------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By: Xxxxxxx Xxxxx Barney Inc.
By:
-----------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
28
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written.
HEARTLAND PROPERTIES, INC.
By:
------------------------------
ALLIANT ENERGY
CHARITABLE FOUNDATION
By:
------------------------------
MHC INVESTMENT COMPANY
By:
------------------------------
MEDIA/COMMUNICATIONS PARTNERS II LIMITED PARTNERSHIP
By:
------------------------------
M/C INVESTORS L.L.C.
By:
------------------------------
XXXXXXXX XXXXXXX XXXX TRUST
DATED MAY 13, 1978
By:
------------------------------
By:
------------------------------
XXXXXXXX X. XXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXXXX XXXX XXXX III DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXXXXXX X. XXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXXXXXXX XXXXXXXX XXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXXXXXX X. XXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXX XXXX XXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXXXXXX X. XXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXXXXXX XXXXXX XXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
The Selling Stockholders as named
in Schedule II to the foregoing
Agreement.
XXXXXXXX X. XXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXXXX XXXX XXXXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXXXXXX X. XXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXXX XXXXXX XXXX XXXXXXXXXX
DATED APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXXXXX XXXXXXX XXXXXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXXXXXX XXXXXXX XXXXXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXXXXX XXXXXXX XXXXXXX 1990 PERSONAL
INCOME TRUST FOR THE BENEFIT OF
XXXXXXXXX XXXXXXXX XXXXXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXX XXX XXXXXX 1990 PERSONAL INCOME
TRUST FOR THE BENEFIT OF
XXXX XXXXXXX XXXXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXX XXX XXXXXX 1990 PERSONAL INCOME
TRUST FOR THE BENEFIT OF
XXXXXXX XXX XXXXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXX XXX XXXXXX 1990 PERSONAL INCOME
TRUST FOR THE BENEFIT OF
XXXXXXXXX XXXXXX XXXXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
XXXX XXX XXXXXX 1990 PERSONAL INCOME
TRUST FOR THE BENEFIT OF
XXXX XXXXXXXX XXXXXX DATED
APRIL 20, 1990
By:
------------------------------
By:
------------------------------
The Selling Stockholders as named in Schedule II of the foregoing Agreement.
XXXXXXX X. XXXX
By:
------------------------------
XXXXX X. XXXX
By:
------------------------------
XXXXX X. XXXXXX, XX.
By:
------------------------------
XXXXXXX X. XXXXXXXXXXX
By:
------------------------------
XXXXX X. XXXXXXX
By:
------------------------------
XXXXXX X. XXXXXXXX
By:
------------------------------
XXXXXX X. XXXXXXX
By:
------------------------------
XXXXXX X. XXXXXX
By:
------------------------------
XXX XXX
By:
------------------------------
XXXXXX X. XXXXXXXXXXXXXX
By:
------------------------------
XXXX X. XXXXXX
By:
------------------------------
THE XXXXXX FAMILY LIMITED PARTNERSHIP
By:
------------------------------
XXXX X. XXXXXXXX
By:
------------------------------
XXXXXX X. XXXXXXXX
By:
------------------------------
XXXXXXX X. XXXXX
By:
------------------------------
XXXXX X. XXXXX
By:
------------------------------
XXXXXX X. XXXXXXX
By:
------------------------------
J. XXXX XXXXXXX
By:
------------------------------
The Selling Stockholders as named in Schedule II to the foregoing Agreement.
29
SCHEDULE I
Number of Shares of
Underwritten Securities
Underwriters To Be Purchased
------------ -----------------------
Xxxxxxx Xxxxx Barney Inc...................................
Credit Suisse First Boston Corporation.....................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.........
Total................................................. 9,000,000
=========
30
SCHEDULE II
Number of Shares of Number of
Underwritten Securities Option Securities
To Be Sold To Be Sold
----------------------- -----------------
Heartland Properties, Inc. .................... 639,692 0
Alliant Energy Charitable Foundation........... 300,000 0
MHC Investment Company......................... 6,741,116 28,124
Xxxxxxxx Xxxxxxx Keon Trust dated May 13, 600 111,678
1978*.........................................
Xxxxxxxx X. Xxxx 1990 Personal Income 58,631 16,406
Trust for the Benefit of Xxxxxx Xxxx
Xxxx III dated April 20, 1990*................
Xxxxxxxx X. Xxxx 1990 Personal Income 58,631 16,406
Trust for the Benefit of Xxxxxxxxx
Xxxxxxxx Keon dated April 20, 1990*...........
Xxxxxxxx X. Xxxx 1990 Personal Income 58,631 16,406
Trust for the Benefit of Xxxx Xxxx Xxxx
dated April 20, 1990*.........................
Xxxxxxxx X. Xxxx 1990 Personal Income 58,631 16,406
Trust for the Benefit of Xxxxxxxx Xxxxxx
Xxxx dated April 20, 1990*....................
Xxxxxxxx X. Xxxx 1990 Personal Income 58,631 16,406
Trust for the Benefit of Xxxxxx Xxxx
Xxxxxx dated April 20, 1990*..................
Xxxxxxxx X. Xxxx 1990 Personal Income 58,631 16,406
Trust for the Benefit of Xxxxx Xxxxxx
Xxxx XxXxxxxxxx dated April 20, 1990*.........
Xxxxxxx Xxxxxxx Xxxxxxx 1990 Personal 137,037 81,713
Income Trust for the Benefit of Xxxxxxxx
Xxxxxxx Xxxxxxx dated April 20, 1990*.........
Xxxxxxx Xxxxxxx Xxxxxxx 1990 Personal 137,037 81,713
Income Trust for the Benefit of
Xxxxxxxxx Xxxxxxxx Xxxxxxx dated April
20, 1990*.....................................
Xxxx Xxx Xxxxxx 1990 Personal Income 78,308 46,692
Trust for the Benefit of Xxxx Xxxxxxx
Xxxxxx dated April 20, 1990*..................
31
Xxxx Xxx Xxxxxx 1990 Personal Income 78,308 46,692
Trust for the Benefit of Xxxxxxx Xxx
Sparks dated April 20, 1990*..................
Xxxx Xxx Xxxxxx 1990 Personal Income 78,308 46,692
Trust for the Benefit of Xxxxxxxxx
Xxxxxx Xxxxxx dated April 20, 1990*...........
Xxxx Xxx Xxxxxx 1990 Personal Income 78,308 46,692
Trust for the Benefit of Xxxx Xxxxxxxx
Sparks dated April 20, 1990*..................
Xxxxxxx X. Xxxx**.............................. 29,296 0
Xxxxxxx X. Xxxx and Xxxxx X. Xxxx**............ 93,704 17,000
Xxxxx X. Xxxxxx, Xx............................ 30,000 20,000
McLeodUSA Incorporated......................... 5,000 0
Xxxxxxx X. Xxxxxxxxxxx......................... 5,000 0
Xxxxx X. Xxxxxxx............................... 20,000 15,000
Xxxxxx X. Xxxxxxxx............................. 7,500 0
Xxxxxx X. Xxxxxxx.............................. 50,000 50,000
Xxxxxx X. Xxxxxx............................... 10,000 0
Xxx Xxx........................................ 20,000 0
Xxxx X. Xxxxxx................................. 7,000 0
The Xxxxxx Family Limited Partnership.......... 29,500 3,000
Xxxx X. Xxxxxxxx............................... 20,000 20,000
Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx........ 20,000 0
Xxxxxxx X. Xxxxx**............................. 29,500 20,000
Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx**.......... 20,500 0
Xxxxxx X. Xxxxxxx**............................ 10,000 0
Xxxxxx X. Xxxxxxxxxxxxxx**..................... 0 35,000
J. Xxxx Xxxxxxx**.............................. 0 10,000
Media/Communication Partners III
Limited Partnership.................... 0 544,514
M/C Investors L.L.C. .......................... 0 27,054
Total..................................... 9,000,000 1,350,000
========= =========
* The address for this trust is c/o Xxxxxx X. Xxxxxxx, 000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000. These trusts are collectively referred to in this
Agreement as the Xxxxxxx family trusts.
**The address for this individual or these individuals, as the case may be, is
c/o the name of this individual or these individuals, McLeodUSA Incorporated,
0000 X. Xxxxxx XX, X.X. Xxx 0000, Xxxxx Xxxxxx, Xxxx 00000-0000
32
EXHIBIT B
[Letterhead of Stockholder]
McLeodUSA Incorporated
----------------------
Public Offering of Class A Common Stock
---------------------------------------
May__, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As Representatives of the several Underwriters
c/o Xxxxxxx Xxxxx Barney Inc.
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between McLeodUSA
Incorporated, a Delaware corporation (the "Company"), certain Selling
Stockholders named therein and each of you as Representatives of a group of
Underwriters named therein, relating to an underwritten public offering of Class
A Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned agrees not to offer, sell or contract to
sell, pledge or otherwise dispose of, directly or indirectly, or participate in
the filing of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act with
respect to, any shares of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for such Common Stock, or
publicly announce an intention to effect any such transaction of, any shares of
Common Stock beneficially owned by the undersigned or any securities convertible
into, or exchangeable for, shares of Common Stock for a period of 90 days
following the day on which the Underwriting Agreement is executed without the
prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc., except shares of Common
Stock disposed of as bona fide gifts or pledges or private sales by a trust to a
settlor of such trust where the recipients of such gifts or the pledgees or
settlor, as the case may be, agree in writing with the Underwriters to be bound
by the terms of this letter.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
