EXHIBIT 99.7
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this "Termination Agreement") is
entered into as of September 30, 2001, by and between McLeodUSA
Incorporated, a Delaware corporation (the "Company"), and the entities
listed on the signature page hereto under the caption "Purchasers" (each
such entity, a "Purchaser" and collectively, the "Purchasers"). Capitalized
terms used herein which are defined in the Exchange Agreement shall have
the meanings set forth in the Exchange Agreement, unless otherwise defined
herein.
WHEREAS, the Company and the Purchasers (the Company and the
Purchasers, collectively, the "Parties" and, individually, a "Party")
entered into a Stock Purchase Agreement, dated as of August 30, 1999, as
amended (the "1999 Stock Purchase Agreement"), pursuant to which the
Company sold to the Purchasers and the Purchasers purchased from the
Company (i) an aggregate of 275,000 shares of the Company's Series B
Preferred Stock, par value $.01 per share, and (ii) an aggregate of 125,000
shares of the Company's Series C Preferred Stock, par value $.01 per share;
WHEREAS, the Parties have agreed to enter into an Exchange
Agreement, dated as of September 30, 2001 (the "Exchange Agreement"), and,
upon the terms and subject to the conditions set forth in the Exchange
Agreement,
(i) the Company wishes to issue to the Purchasers (x) an
aggregate of 275,000 shares of the Company's Series D
Preferred Stock, par value $.01 per share, in exchange for
all of the outstanding shares of the Company's Series B
Preferred Stock, par value $.01 per share, held by the
Purchasers and (y) an aggregate of 125,000 shares of the
Company's Series E Preferred Stock, par value $.01 per
share, in exchange for all of the outstanding shares of the
Company's Series C Preferred Stock, par value $.01 per
share, held by the Purchasers, and
(ii) the Purchasers wish to consummate the foregoing exchanges;
and
WHEREAS, in connection with entering into the Exchange Agreement,
the Parties wish to terminate the 1999 Stock Purchase Agreement and have
agreed to enter into this Termination Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, and for other good
and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
1. TERMINATION
The 1999 Stock Purchase Agreement shall be terminated in its
entirety upon consummation of the transaction contemplated by the Exchange
Agreement (including, without limitation, the due filing of the
Certificates of Designation with the Secretary of State of the State of
Delaware in accordance with the laws of the State of Delaware and the
delivery of certificates in accordance with Section 1.2(b) of the Exchange
Agreement), and shall thereafter be of no further force and effect. The
Parties agree and confirm that there are no unsatisfied obligations of any
of the Parties under the 1999 Stock Purchase Agreement except as provided
for in SECTION 2.
2. REMAINING OBLIGATIONS OF THE PARTIES
2.1. OBLIGATIONS PURSUANT TO THE 1999 STOCK PURCHASE AGREEMENT
It is understood by the Parties that Sections 6.2, 8.2 (other
than the second sentence therein), 8.3, 8.13, 8.14 and 8.15 of the 1999
Stock Purchase Agreement shall survive the termination of the 1999 Stock
Purchase Agreement.
2.2. OBLIGATIONS REGARDING THE EXCHANGE AGREEMENT
It is understood by the Parties that concurrently with the
execution of this Termination Agreement the Parties will cause the
execution of the Exchange Agreement.
3. MUTUAL RELEASE AND INDEMNITY
Upon consummation of the transactions contemplated by the
Exchange Agreement, each of the Parties hereby shall release and forever
discharge the other Parties, and their heirs, successors and assigns, from
any and all claims, obligations or liabilities, whether now or hereafter
existing, relating to the 1999 Stock Purchase Agreement except as provided
for in SECTION 2, and shall agree to indemnify and hold harmless the other
Parties from any claim or assertion of obligations or liabilities made by
or on behalf of such releasing and indemnifying Party.
4. MISCELLANEOUS
4.1. BINDING EFFECT
This Termination Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns.
4.2. GOVERNING LAW
THIS TERMINATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW.
4.3. SUBMISSION TO JURISDICTION
Each of the Parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State
of New York and of the United States of America, in each case located in
the County of New York, for any litigation arising out of or relating to
this Termination Agreement and the transactions contemplated hereby and
thereby (and agrees not to commence any litigation relating hereto or
thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to its
respective address set forth in this Termination Agreement shall be
effective service of process for any litigation brought against it in any
such court. Each of the Parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any
litigation arising out of this Termination Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United
States of America, in each case located in the County of New York, hereby
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such litigation brought in any such court
has been brought in an inconvenient forum.
4.4. WAIVER OF JURY TRIAL
THE COMPANY AND THE PURCHASERS HEREBY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
TERMINATION AGREEMENT.
4.5. NOTICES
All notices, requests, consents and other communications
hereunder to any Party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier or first class registered or certified mail,
return receipt requested, postage prepaid, addressed to such Party at the
address set forth below or such other address as may hereafter be
designated in writing by such Party to the other Parties:
(i) if to the Company, to:
McLeodUSA Incorporated
McLeodUSA Technology Park
0000 X Xxxxxx XX
XX Xxx 0000
Xxxxx Xxxxxx, Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Rings, Esq.
Group Vice President and Chief Legal Officer
with a copy to (which shall not constitute notice):
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
(ii) if to the Purchasers, to:
c/o Forstmann Little & Co.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
All such notices, requests, consents and other communications shall be
deemed to have been given or made if and when delivered personally or by
overnight courier to the parties at the above addresses or sent by
electronic transmission, with confirmation received, to the telecopy
numbers specified above (or at such other address or telecopy number for a
party as shall be specified by like notice).
4.6. EXECUTION
This Termination Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute
but one agreement.
* * *
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Termination Agreement as of the date first above written.
PURCHASERS
FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V, L.P.
By: FLC XXX Partnership, L.P.
its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx,
a general partner
FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY
MANAGEMENT BUYOUT PARTNERSHIP-VI, L.P.
By: FLC XXIX Partnership, L.P.
its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx,
a general partner
FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY
MANAGEMENT BUYOUT PARTNERSHIP-VII, L.P.
By: FLC XXXIII Partnership, L.P.
its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx,
a general partner
MCLEODUSA INCORPORATED
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief Executive Officer
