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EXHIBIT 99.3
EXECUTION COPY
July 14, 2000
EXCHANGE AGENT AGREEMENT
HSBC Bank USA
140 Broadway - Level A
New York, New York 10005-1180
Ladies and Gentlemen:
MGC Communications, Inc. d/b/a Mpower Communications Corp. ("the
Company") and its wholly owned subsidiary Mpower Holdings Corporation
("Holdings; and, together with the Company, the "Issuers") propose to make an
offer (the "Exchange Offer") to exchange up to $429,463,000 aggregate principal
amount of their 13% Senior Notes Due 2010 (the "New Notes") for a like principal
amount of their outstanding 13% Senior Notes Due 2010 (the "Old Notes"). The
terms and conditions of the Exchange Offer as currently contemplated are set
forth in a prospectus (the "Prospectus" included in the Issuers' registration
statement on Form S-4 (File No. 333-39884 and File No. 333-39884-01,
respectively) as amended (the "Registration Statement") filed with the
Securities and Exchange Commission (the "SEC")), and proposed to be distributed
to all record holders of the Old Notes. The Old Notes and the New Notes are
collectively referred to herein as the "Notes" or the "Securities." Capitalized
terms used herein and not defined shall have the respective meanings ascribed to
them in the Prospectus or the accompanying Letter of Transmittal.
The Issuers hereby appoint HSBC Bank USA to act as exchange agent
(the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to HSBC Bank USA.
The Exchange Offer is expected to be commenced by the Issuers on or
about July 26, 2000. The Letter of Transmittal accompanying the Prospectus is to
be used by the holders of the Old Notes to accept the Exchange Offer, and
contains instructions with respect to the delivery of Old Notes tendered. The
Exchange Agent's obligations with respect to receipt and inspection of the
Letter of Transmittal in connection with the Exchange Offer shall be satisfied
for all purposes hereof by inspection of the electronic message transmitted to
the Exchange Agent by Exchange Offer participants in accordance with the
Automated Tender Offer Program ("ATOP") of the Depositary Trust Company ("DTC"),
and by otherwise observing and complying with all procedures established by DTC
in connection with ATOP, to the extent that ATOP is utilized by Exchange Offer
participants.
The Exchange Offer shall expire at 5:00 p.m., New York City time, on
August 22, 2000 or on such later date or time to which the Issuers may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Issuers
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expressly reserve the right to extend the Exchange Offer from time to time and
may extend the Exchange Offer by giving oral (confirmed in writing) or written
notice to you at any time before 9:00 a.m., New York City time, on the business
day following the previously scheduled Expiration Date, and in such case the
term "Expiration Date" shall mean the time and date on which such Exchange Offer
as so extended shall expire.
The Issuers expressly reserve the right, in their sole discretion,
to delay, amend or terminate the Exchange Offer, and not to accept for exchange
any Old Notes not theretofore accepted for exchange, in among other cases upon
the occurrence of any of the conditions of the Exchange Offer specified in the
Prospectus under the captions "The Exchange Offer -- Terms of the exchange
offer" "-- Procedures for tendering outstanding notes" and "-- Conditions of the
exchange offer." The Issuers will give to you as promptly as practicable oral
(confirmed in writing) or written notice of any delay, amendment, termination or
non-acceptance.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth herein or in the section of the Prospectus captioned the
"The Exchange Offer," in the Letter of Transmittal accompanying the Prospectus
and such duties which are necessarily incidental thereto.
2. You will establish an account with respect to the Old Notes
at DTC (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer
within two business days after the date of the Prospectus and any financial
institution that is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of the Old Notes by causing the Book-Entry Transfer
Facility to transfer such Old Notes into your account in accordance with the
Book-Entry Transfer Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Notes (or confirmation of book-entry transfers into your
account at the Book-Entry Transfer Facility) and any other documents delivered
or mailed to you by or for holders of the Old Notes to ascertain whether: (i)
the Letters of Transmittal, certificates and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein and in the Prospectus and that such book-entry confirmations are in due
and proper form and contain the information required to be set forth therein and
(ii) the Old Notes have otherwise been properly tendered. In each case where the
Letter of Transmittal or any other document has been improperly completed or
executed or where book-entry confirmations are not in due and proper form or
omit certain information or any of the certificates for Old Notes are not in
proper form for transfer or some other irregularity in connection with the
acceptance of the Exchange Offer exists, you will endeavor to inform the
presenters of the need for fulfillment of all requirements and to take any other
action as may be necessary or advisable to cause such irregularity to be
corrected.
4. With the approval of an authorized signatory of each of the
Issuers (the President, Chief Financial Officer, Comptroller, Secretary or
Assistant Secretary, hereinafter an
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"Authorized Signatory") (such approval, if given orally, promptly to be
confirmed in writing) or any other party designated by such officer in writing,
you are authorized to waive any irregularities in connection with any tender of
Old Notes pursuant to the Exchange Offer.
5. Tenders of Old Notes may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer -- Procedures for tendering outstanding notes" and Old Notes
shall be considered properly tendered to you only when tendered in accordance
with the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Old Notes which
any Authorized Signatory of each of the Issuers or any other party designated by
any such officer in writing shall approve as having been properly tendered shall
be considered to be properly tendered (such approval, if given orally, promptly
shall be confirmed in writing).
6. You shall advise the Issuers with respect to any Old Notes
delivered subsequent to the Expiration Date and accept their instructions with
respect to disposition of such Old Notes.
7. You shall accept tenders:
(a) in cases where the Old Notes are registered in two or
more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the
Letter of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old
Notes provided that customary transfer requirements, including any applicable
transfer taxes, are fulfilled.
You shall accept partial tenders of Old Notes where so
indicated and as permitted in the Letter of Transmittal and deliver certificates
for Old Notes to the transfer agent for split-up and return any untendered Old
Notes to the holder (or such other person as may be designated in the Letter of
Transmittal) as promptly as practicable after expiration or termination of the
Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Issuers will notify you (such notice if given orally,
promptly to be confirmed in writing) of their acceptance, promptly after the
Expiration Date, of all Old Notes properly tendered and you, on behalf of the
Issuers, will exchange such Old Notes for New Notes and cause such Old Notes to
be canceled. Delivery of New Notes will be made on behalf of the Issuers by you
at the rate of $1,000 principal amount of New Notes for each $1,000 principal
amount of the Old Notes tendered promptly after notice (such notice if given
orally, promptly to be confirmed in writing) of acceptance of said Old Notes by
the Issuers; provided, however, that in all cases, Old Notes tendered pursuant
to the Exchange Offer will be exchanged only after timely receipt by you of
certificates for such Old Notes (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal (or
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facsimile thereof or an Agent's Message in lieu thereof) with any required
signature guarantees and any other required document. Unless otherwise
instructed in writing by an Authorized Signatory of each of the Issuers, you
shall issue New Notes only in denominations of $1,000 or any integral multiple
thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable,
except that, subject to the terms and upon the conditions set forth in the
Prospectus and the Letter of Transmittal, Old Notes tendered pursuant to the
Exchange Offer may be withdrawn at any time on or prior to the Expiration Date
in accordance with the terms of the Exchange Offer.
10. The Issuers shall not be required to exchange any Old Notes
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Issuers not to exchange any Old Notes tendered
shall be given (such notices if given orally, promptly shall be confirmed in
writing) by an Authorized Signatory of each of the Issuers to you.
11. If, pursuant to the Exchange Offer, the Issuers do not accept
for exchange all or part of the Old Notes tendered because of an invalid tender,
the occurrence of certain other events set forth in the Prospectus or otherwise,
you shall as soon as practicable after the expiration or termination of the
Exchange Offer return those certificates for unaccepted Old Notes (or effect
appropriate book-entry transfer), together with any related required documents
and the Letters of Transmittal relating thereto that are in your possession, to
the persons who deposited them (or effected such book-entry transfer).
12. All certificates for reissued Old Notes, unaccepted Old Notes
or New Notes (other than those effected by book-entry transfer) shall be
forwarded by (a) first-class mail, postage pre-paid under a blanket surety bond
protecting you and the Issuers from loss or liability arising out of the
non-receipt or non-delivery of such certificates or (b) by registered mail
insured separately for the replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, bank or
other persons or to engage or utilize any persons to solicit tenders.
14. As Exchange Agent hereunder you:
(a) will be regarded as making no representations and
having no responsibilities as to the validity, sufficiency, value or genuineness
of any of the Old Notes deposited with you pursuant to the Exchange Offer, and
will not be required to and will make no representation as to the validity,
value or genuineness of the Exchange Offer;
(b) shall not be obligated to take any legal action
hereunder which might in your reasonable judgment involve any expense or
liability, unless you shall have been furnished with reasonable indemnity;
(c) shall not be liable to either of the Issuers for any
action taken or omitted by you, or any action suffered by you to be taken or
omitted, without negligence, misconduct or
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bad faith on your part, by reason of or as a result of the administration of
your duties hereunder in accordance with the terms and conditions of this
Agreement or by reason of your compliance with the instructions set forth herein
or with any written or oral instructions of an Authorized Signatory delivered to
you pursuant hereto, and may reasonably rely on and shall be protected in acting
in good faith in reliance upon any certificate, instrument, opinion, notice,
letter, facsimile or other document or security delivered to you and reasonably
believed by you to be genuine and to have been signed by the proper party or
parties;
(d) may reasonably act upon any tender, statement,
request, comment, agreement or other instrument whatsoever not only as to its
due execution and validity and effectiveness of its provisions, but also as to
the truth and accuracy of any information contained therein, which you shall in
good faith reasonably believe to be genuine or to have been signed or
represented by a proper person or persons;
(e) may rely on and shall be protected in acting upon
written notice or oral instructions of an Authorized Signatory of the Issuers;
(f) shall not advise any person tendering Old Notes
pursuant to the Exchange Offer as to whether to tender or refrain from tendering
all or any portion of Old Notes or as to the market value, decline or
appreciation in market value of any Old Notes that may or may not occur as a
result of the Exchange Offer or as to the market value of the Exchange Notes;
and
(g) may consult with counsel with respect to any questions
relating to your duties and responsibilities, and the written advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by you hereunder in good faith
and in reliance thereon.
15. You shall send to all holders of Old Notes a copy of the
Prospectus, the Letter of Transmittal, the Notice of Guaranteed Delivery (as
defined in the Prospectus) and such other documents (collectively, the "Exchange
Offer Documents") as may be furnished by the Issuers to commence the Exchange
Offer and take such other action as may from time to time be requested by the
Issuers or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Exchange Offer Documents or such other
forms as may be approved from time to time by the Issuers, to all holders of Old
Notes and to all persons requesting such documents and to accept and comply with
telephone requests for information relating to the Exchange Offer, provided that
such information shall relate only to the procedures for accepting (or
withdrawing from) the Exchange Offer. The Issuers will furnish you with copies
of such documents at your request. All other requests for information relating
to the Exchange Offer shall be directed to the Issuers, Attention: Russell
Zuckerman, at the Issuers' offices at 175 Sully's Trail, Pittsford, New York
14534; telephone (716) 218-0165.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to the General Counsel of the Company,
and such other person or persons as the Issuers may request in writing, daily,
and more frequently during the week immediately preceding the Expiration Date
and if otherwise requested, up to and including the Expiration Date, as to the
aggregate principal amount of Old Notes which have been tendered pursuant to
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the Exchange Offer and the items received by you pursuant to the Exchange Offer
and this Agreement, separately reporting and giving cumulative totals as to
items properly received and items improperly received. In addition, you will
also inform, and cooperate in making available to, the Issuers or any such other
person or persons as the Issuers request in writing from time to time prior to
the Expiration Date of such other information as it or he or she reasonably
requests. Such cooperation shall include, without limitation, the granting by
you to the Issuers and such person as the Issuers may request of access to those
persons on your staff who are responsible for receiving tenders, in order to
ensure that immediately prior to the Expiration Date the Issuers shall have
received information in sufficient detail to enable it to decide whether to
extend the Exchange Offer. You shall prepare a final list of all persons whose
tenders were accepted, the aggregate principal amount of Old Notes tendered, the
aggregate principal amount of Old Notes accepted and the identity of any
Participating Broker-Dealers and the aggregate principal amount of Exchange
Notes delivered to each, and deliver said list to the Issuers.
17. Letters of Transmittal and Notices of Guaranteed Delivery
shall be stamped by you as to the date and the time of receipt thereof and shall
be preserved by you for a period of time at least equal to the period of time
you customarily preserve other records pertaining to the transfer of securities,
or one year, whichever is longer, and thereafter shall be delivered by you to
the Issuers. You shall dispose of unused Letters of Transmittal and other
surplus materials in accordance with your customary procedures.
18. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to funds deposited with you
for the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Issuers, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder you shall
be entitled to such compensation and reimbursement of out-of-pocket expenses as
set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus, the Letter
of Transmittal and the other documents associated with the Exchange Offer
attached hereto and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus, the
Letter of Transmittal and such other forms (as they may be amended from time to
time), on the other hand, shall be resolved in favor of the Prospectus, the
Letter of Transmittal and such other forms, except with respect to the duties,
liabilities and indemnification of you as Exchange Agent which shall be
controlled by this Agreement.
21. The Issuers agree, jointly and severally, to indemnify and
hold you harmless in your capacity as Exchange Agent hereunder against any
liability, cost or expense, including reasonable attorneys' fees and expenses,
arising out of or in connection with any act, omission, delay or refusal made by
you in reasonable reliance upon any signature, endorsement, assignment,
certificate, order, request, notice, instruction or other instrument or document
reasonably believed by you to be valid, genuine and sufficient and in accepting
any tender or effecting any transfer of Old Notes reasonably believed by you in
good faith to be authorized, and in delaying or refusing in good faith to accept
any tenders or effect any transfer of Old
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Notes; provided, however, that the Issuers shall not be liable for
indemnification or otherwise for any loss, liability, cost or expense to the
extent arising out of your negligence, willful misconduct or bad faith. In no
case shall the Issuers be liable under this indemnity with respect to any claim
against you unless the Issuers shall be notified by you, by letter or facsimile
confirmed by letter, of the written assertion of a claim against you or any
other action commenced against you, promptly after you shall have received any
such written assertion or notice of commencement of action.
22. You shall arrange to comply with all requirements under the
tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Issuers understand that you are required, in certain
instances, to deduct thirty-one percent (31%) with respect to interest paid on
the Exchange Notes and proceeds from the sale, exchange, redemption or
retirement of the Exchange Notes from holders who have not supplied their
correct Taxpayer Identification Numbers or required certification. Such funds
will be turned over to the Internal Revenue Service in accordance with
applicable regulations.
23. You shall notify the Issuers of the amount of any transfer
taxes payable in respect of the exchange of Old Notes and shall deliver or cause
to be delivered, in a timely manner, to each governmental authority to which any
transfer taxes are payable in respect of the exchange of Old Notes your check in
the amount of all transfer taxes so payable, and the Issuers shall reimburse you
for the amount of any and all transfer taxes payable in respect of the exchange
of Old Notes; provided, however, that you shall reimburse the Issuers for
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent
hereunder shall be construed and enforced in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such state, and shall inure to the benefit of, and the obligations
created hereby shall be binding upon, the successors and assigns of each of the
parties hereto and nothing in this Agreement, express or implied, is intended to
or shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement. Without limitation of the
foregoing, the parties hereto expressly agree that no holder of Old Notes or
Exchange Notes shall have any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
25. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
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27. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized representative of the party to
be charged.
28. Unless otherwise provided herein, all notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile) and shall be given to such party, addressed to it, as its address or
telecopy number set forth below:
If to the Issuers:
Mpower Communications
Mpower Holding Corporation
175 Sully's Trail
Pittsford, New York 14534
Facsimile: (716) 218-0165
Attention: Russell Zuckerman
If to the Exchange Agent:
HSBC Bank USA
140 Broadway - Level A
New York, New York 10005-1180
Facsimile: (212) 658-2292
Attention: Paulette Shaw
29. Unless terminated earlier by the parties hereto, this
Agreement shall terminate 90 days following the Expiration Date. Notwithstanding
the foregoing, Paragraphs 18, 19 and 21 through 29 shall survive the termination
of this Agreement. Upon any termination of this Agreement, you shall promptly
deliver to the Issuers any certificates for Notes, funds or property (including,
without limitation, Letters of Transmittal and any other documents relating to
the Exchange Offer) then held by you as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as of the date
hereof.
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Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
MGC COMMUNICATIONS, INC.
By: /s/ Russell I. Zuckerman
-----------------------------------
Name: Russell I. Zuckerman
Title: Secretary
MPOWER HOLDING CORPORATION
By: /s/ Russell I. Zuckerman
-----------------------------------
Name: Russell I. Zuckerman
Title: Secretary
Accepted as the date
first above written:
HSBC BANK USA
By: /s/ James M. Foley
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Name: James M. Foley
Title: Assistant Vice President
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SCHEDULE I
MGC COMMUNICATIONS, INC.
MPOWER HOLDING CORPORATION
Exchange Agency
Fee Schedule
Flat Fee..............................................................$ 5,000.00
Out-Of-Pocket Expenses
Fees quoted do not include out-of-pocket expenses actually incurred
including, but not limited to, reasonable legal fees and expenses, facsimile,
stationery, postage, telephone, overnight courier and messenger costs, all of
which shall be paid by the Issuers.
