EXHIBIT 10.56
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.
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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.
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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
6400 C Street SW
PO Box 3177
Cedar Rapids, Iowa 52406-3177
Telecopy No.: (319) 790-7901
Attention: Randall Rings, Esq.
Group Vice President and Chief Legal Officer
with a copy to (which shall not constitute notice):
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004
Telecopy No.: (202) 637-5910
Attention: Joseph G. Connolly, Jr., Esq.
(ii) if to the Purchasers, to:
c/o Forstmann Little & Co.
767 Fifth Avenue
New York, NY 10153
Telecopy No.: (212) 759-9059
Attention: Thomas Lister
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Telecopy No.: (212) 859-8587
Attention: Robert C. Schwenkel, Esq.
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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:
-------------------------
Winston W. Hutchins,
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:
-------------------------
Winston W. Hutchins,
a general partner
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FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-VII, L.P.
By: FLC XXXIII Partnership, L.P.
its general partner
By:
-------------------------
Winston W. Hutchins,
a general partner
McLEODUSA INCORPORATED
By:
--------------------------------
Name: Stephen C. Gray
Title: President and Chief Executive Officer
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