<PAGE>
Exhibit 99.1
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON NOVEMBER __, 2000,
UNLESS EXTENDED (THE "EXPIRATION DATE").
McLeodUSA INCORPORATED
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE ITS
[12%/11 1/2%] SENIOR NOTES DUE [JULY 15, 2008/MAY 1, 2009]
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF THE OUTSTANDING
[12%/11 1/2] SENIOR NOTES DUE [JULY 15, 2008/MAY 1, 2009]
OF CAPROCK COMMUNICATIONS CORP.
The Exchange Agent
for the Exchange Offer is:
UNITED STATES TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
BY FACSIMILE: BY MAIL:
<S> <C>
(212) 780-0592 United States Trust Company of New York
Attention: Customer Service P.O. Box 843 Cooper Station
Confirm by Telephone to: (800) 548-6565 New York, New York 10276
Attention: Corporate Trust Services
BY HAND BEFORE 4:30 P.M.: BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.:
United States Trust Company of New York United States Trust Company of New York
111 Broadway 770 Broadway, 13th Floor
New York, New York 10006 New York, New York 10003
Attention: Lower Level Corporate Trust Window
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
<PAGE>
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of CapRock
Notes (as defined below) either if CapRock Notes are to be forwarded herewith or
if tenders of CapRock Notes are to be made by book-entry transfer to an account
maintained by United States Trust Company of New York (the "Exchange Agent") at
The Depository Trust Company ("DTC") pursuant to the procedures set forth in
"The Exchange Offer--Procedures for Tendering CapRock Notes" in the Prospectus.
Holders of CapRock Notes whose certificates (the "Certificates") for
such CapRock Notes are not immediately available or who cannot deliver their
Certificates, this Letter of Transmittal and all other required documents to the
Exchange Agent on or prior to the Expiration Date or who cannot complete the
procedures for book-entry transfer on a timely basis, may tender their CapRock
Notes according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering CapRock Notes" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
List below the CapRock Notes of which you are a holder. If the space
provided below is inadequate, list the certificate numbers and principal amount
on a separate SIGNED schedule and attach that schedule to this Letter of
Transmittal. See Instruction 3.
<TABLE>
<CAPTION>
ALL TENDERING HOLDERS COMPLETE THIS BOX:
---------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF CAPROCK NOTES TENDERED
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(FILL IN, IF BLANK) CAPROCK NOTES TENDERED
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
CERTIFICATE
NUMBER(S)*
(ATTACH ADDITIONAL PRINCIPAL AMOUNT
LIST (ATTACH ADDITIONAL PRINCIPAL AMOUNT
IF NECESSARY) LIST IF NECESSARY) TENDERED (IF LESS
THAN ALL)**
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
$
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
TOTAL AMOUNT TENDERED: $ $
---------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders. Such holders should check the appropriate box below and provide
the requested information.
** Need not be completed if tendering for exchange all CapRock Notes held. CapRock Notes may be tendered in
whole or in part in integral multiples of $1,000 principal amount. All CapRock Notes held shall be deemed
tendered unless a lesser number is specified in this column. See Instruction 4.
---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY. SEE INSTRUCTION 1)
|_| CHECK HERE IF TENDERED CAPROCK NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT DTC AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
--------------------------------------------
DTC Account Number:
-------------------------------------------------------
Transaction Code Number:
--------------------------------------------------
|_| CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED CAPROCK NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
--------------------------------------------
Window Ticket Number (if any):
--------------------------------------------
Date of Notice of Guaranteed Delivery:
------------------------------------
Institution Which Guaranteed Delivery:
------------------------------------
IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER:
Name of Tendering Institution:
--------------------------------------------
DTC Account Number:
-------------------------------------------------------
Transaction Code Number:
--------------------------------------------------
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to McLeodUSA Incorporated, a Delaware
corporation (the "Company"), the above described principal amount of the [12%/11
1/2%] Senior Notes Due [July 15, 2008/May 1, 2009] of CapRock Communications
Corp., a Texas Corporation (the "CapRock Notes"), in exchange for a like
principal amount of the Company's [12%/11 1/2%] Senior Notes Due [July 15,
2008/May 1, 2009] (the "McLeodUSA Notes"), which have been registered under the
Securities Act of 1933 (the "Securities Act"), upon the terms and subject to the
conditions set forth in the Prospectus dated _______ __,2000 (as the same may be
amended or supplemented from time to time, the "Prospectus"), receipt of which
is hereby acknowledged, and in this Letter of Transmittal (which, together with
the Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of the
CapRock Notes tendered herewith, the undersigned hereby sells, assigns and
transfers to or upon the order of the Company all right, title and interest in
and to such CapRock Notes as are being tendered herewith. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as its agent and
attorney-in-fact (with full knowledge that the Exchange Agent is also acting as
agent of the Company in connection with the Exchange Offer) with respect to the
tendered CapRock Notes, with full power of substitution (such power of attorney
being an irrevocable power coupled with an interest), subject only to the right
of withdrawal described in the Prospectus, to: (i) deliver such CapRock Notes to
the Company together with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Company upon receipt by the Exchange
Agent, as the undersigned's agent, of the McLeodUSA Notes to be issued in
exchange for such CapRock Notes; (ii) present Certificates for such CapRock
Notes for transfer, and to transfer such CapRock Notes on the account books
maintained by DTC; and (iii) receive for the account of the Company all benefits
and otherwise exercise all rights of beneficial ownership of such CapRock Notes,
all in accordance with the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
CAPROCK NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE,
THE COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE
AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE
CAPROCK NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES.
THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS
DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO
COMPLETE THE EXCHANGE, SALE, ASSIGNMENT AND TRANSFER OF THE CAPROCK NOTES
TENDERED HEREBY. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the CapRock
Notes tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such CapRock Notes. The
Certificate number(s) and the CapRock Notes that the undersigned wishes to
tender should be indicated in the appropriate boxes above.
If any tendered CapRock Notes are not exchanged pursuant to the
Exchange Offer for any reason, or if Certificates are submitted for more CapRock
Notes than are tendered or accepted for exchange, Certificates for such
nonexchanged or nontendered CapRock Notes will be returned (or, in the case of
CapRock Notes tendered by book-entry transfer, such CapRock Notes will be
credited to an account maintained at DTC), without expense to the tendering
holder promptly following the expiration or termination of the Exchange Offer.
<PAGE>
The undersigned understands that tenders of CapRock Notes pursuant to
any one of the procedures described in "The Exchange Offer--Procedures for
Tendering CapRock Notes" in the Prospectus and in the instructions herein will,
upon the Company's acceptance for exchange of such tendered CapRock Notes,
constitute a binding agreement between the undersigned and the Company upon the
terms and subject to the conditions of the Exchange Offer. The undersigned
recognizes that, under certain circumstances set forth in the Prospectus, the
Company may not be required to accept for exchange any of the CapRock Notes
tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the McLeodUSA Notes be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of CapRock Notes, that such McLeodUSA Notes be credited to the account
indicated above maintained at DTC. If applicable, substitute Certificates
representing CapRock Notes not exchanged or not accepted for exchange will be
issued to the undersigned or, in the case of a book-entry transfer of CapRock
Notes, will be credited to the account indicated above maintained at DTC.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please deliver McLeodUSA Notes to the undersigned at the address shown below the
undersigned's signature.
All authority herein conferred or agreed to be conferred in this Letter
of Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus and in the Instructions contained in this Letter of
Transmittal, this tender is irrevocable.
<PAGE>
<TABLE>
<CAPTION>
PLEASE SIGN HERE PLEASE SIGN HERE
<S> <C>
-------------------------------------------- --------------------------------------------
Authorized Signature Authorized Signature
Name: Name:
--------------------------------------- ---------------------------------------
Title: Title:
-------------------------------------- --------------------------------------
Address: Address:
------------------------------------ ------------------------------------
Telephone Number: Telephone Number:
--------------------------- ---------------------------
Dated: Dated:
-------------------------------------- --------------------------------------
-------------------------------------------- --------------------------------------------
Taxpayer Identification or Social Security Number Taxpayer Identification or Social Security Number
</TABLE>
(NOTE: Signature(s) must be guaranteed if required by Instructions 2
and 5. This Letter of Transmittal must be signed by the registered holder(s)
exactly as the name(s) appear(s) on Certificate(s) for the CapRock Notes hereby
tendered or on a security position listing, or by any person(s) authorized to
become the registered holder(s) by endorsements and documents transmitted
herewith, including such opinions of counsel, certifications and other
information as may be required by the Company or the Trustee for the CapRock
Notes. If signature is by an attorney-in-fact, executor, administrator, trustee,
guardian, officer of a corporation or another acting in a fiduciary capacity or
representative capacity, please set forth the signer's full title. See
Instructions 2 and 5. Please complete substitute Form W-9 below.)
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 2 AND 5)
<S> <C>
Signature(s) Guaranteed by an
Eligible Institution: Date:
----------------------------------------- ----------------
AUTHORIZED SIGNATURE
Name of Eligible Institution
Guaranteeing Signature:
----------------------------------------------------------------
Address:
-----------------
Capacity (full title):
----------------------------------------- ----------------
Telephone Number:
----------------------------------------- ----------------
---------------------------------------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 2, 5 AND 6)
To be completed ONLY if McLeodUSA Notes or any CapRock Notes that are not
tendered are to be issued in the name of someone other than the registered
holder(s) of the CapRock Notes whose name(s) appear(s) above.
Issue:
|_| CapRock Notes not tendered, to:
|_| McLeodUSA Notes, to:
Name(s)
-----------------------------------------------------------------------
Address
-----------------------------------------------------------------------
-------------------------------------------------------------------------------
Telephone Number:
--------------------------------------------------------------
-------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 2, 5 AND 6)
To be completed ONLY if McLeodUSA Notes or any CapRock Notes that are not
tendered are to be sent to someone other than the registered holder(s) of the
CapRock Notes whose name(s) appear(s) above, or to such registered holder(s) at
an address other than that shown above.
Mail:
|_| CapRock Notes not tendered, to:
|_| McLeodUSA Notes, to:
Name(s)
-----------------------------------------------------------------------
Address
-----------------------------------------------------------------------
-------------------------------------------------------------------------------
Telephone Number:
--------------------------------------------------------------
-------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
-------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
(FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER)
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering CapRock Notes" in the Prospectus. Certificates,
or timely confirmation of a book-entry transfer of such CapRock Notes into the
Exchange Agent's account at DTC, as well as this Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. The term "book-entry confirmation"
means a timely confirmation of book-entry transfer of CapRock Notes into the
Exchange Agent's account at DTC. CapRock Notes may be tendered in whole or in
part in integral multiples of $1,000 principal amount.
Holders who wish to tender their CapRock Notes and: (i) whose
Certificates for such CapRock Notes are not immediately available; (ii) who
cannot deliver their Certificates, this Letter of Transmittal and all other
required documents to the Exchange Agent prior to the Expiration Date; or (iii)
who cannot complete the procedures for delivery by book-entry transfer on a
timely basis, may tender their CapRock Notes by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering CapRock
Notes" in the Prospectus. Pursuant to such procedures: (i) such tender must be
made by or through an Eligible Institution (as defined below); (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form accompanying this Letter of Transmittal, must be received by the Exchange
Agent prior to the Expiration Date; and (iii) the Certificates (or a book-entry
confirmation) representing all tendered CapRock Notes, in proper form for
transfer, together with a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering CapRock Notes" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery. For CapRock Notes to be properly tendered pursuant to the
guaranteed delivery procedure, the Exchange Agent must receive a Notice of
Guaranteed Delivery prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein): (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker or
dealer; (iii) a credit union; (iv) a national securities exchange, registered
securities association or clearing agency; or (v) a savings association that is
a participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CAPROCK NOTES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY AND PROPER INSURANCE SHOULD BE OBTAINED. NO
LETTER OF TRANSMITTAL OR CAPROCK NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS
MAY REQUEST THEIR
<PAGE>
RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO
EFFECT THESE TRANSACTIONS FOR SUCH HOLDERS.
The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance of
such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if: (i) this Letter of Transmittal is signed by the
registered holder (which shall include any participant in DTC whose name appears
on a security position listing as the owner of the CapRock Notes) of CapRock
Notes tendered herewith, unless such holder has completed either the box
entitled "Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" above; or (ii) such CapRock Notes are tendered for the account of
a firm that is an Eligible Institution. In all other cases, an Eligible
Institution must guarantee the signature(s) on this Letter of Transmittal. See
Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of CapRock Notes Tendered" is inadequate, the Certificate number(s)
and/or the principal amount of CapRock Notes and any other required information
should be listed on a separate signed schedule and attached to this Letter of
Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of CapRock Notes will
be accepted only in integral multiples of $1,000 principal amount. If less than
all the CapRock Notes evidenced by any Certificate submitted are to be tendered,
fill in the principal amount of CapRock Notes which are to be tendered in the
box entitled "Principal Amount Tendered (if less than all)." In such case, new
Certificate(s) for the remainder of the CapRock Notes that were evidenced by the
old Certificate(s) will be sent to the tendering holder, unless the appropriate
boxes on this Letter of Transmittal are completed, promptly after the Expiration
Date. All CapRock Notes represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of CapRock Notes may be
withdrawn at any time prior to the Expiration Date. In order for a withdrawal to
be effective, a written, telegraphic or facsimile transmission of such notice of
withdrawal must be timely received by the Exchange Agent at its address set
forth above prior to the Expiration Date. Any such notice of withdrawal must
specify the name of the person who tendered the CapRock Notes to be withdrawn,
the aggregate principal amount of CapRock Notes to be withdrawn, and (if
Certificates for such CapRock Notes have been tendered) the name of the
registered holder of the CapRock Notes as set forth on the Certificate(s), if
different from that of the person who tendered such CapRock Notes. If
Certificates for CapRock Notes have been delivered or otherwise identified to
the Exchange Agent, the notice of withdrawal must specify the serial numbers on
the particular Certificates for the CapRock Notes to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of CapRock Notes tendered for the account of an
Eligible Institution. If CapRock Notes have been tendered pursuant to the
procedures for book-entry transfer set forth in "The Exchange Offer--Procedures
for Tendering CapRock Notes," the notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawal of CapRock Notes
and must otherwise comply with the procedures of DTC. Withdrawals of tenders of
CapRock Notes may not be rescinded. CapRock Notes properly withdrawn will not be
deemed validly tendered for purposes of the Exchange Offer, but may be
retendered at any subsequent time prior to the Expiration Date by following any
of the procedures described in the Prospectus under "The Exchange
Offer--Procedures for Tendering CapRock Notes."
<PAGE>
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all parties.
Neither the Company, any affiliates of the Company, the Exchange Agent or any
other person shall be under any duty to give any notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification. Any CapRock Notes which have been tendered but which
are withdrawn will be returned to the holder thereof promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder(s) of the
CapRock Notes tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) or on a security position
listing, without alteration, enlargement or any change whatsoever.
If any of the CapRock Notes tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered CapRock Notes are registered in different names on
several Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are names in
which Certificates are registered.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to the Company, in its sole discretion, of such persons'
authority to so act.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the CapRock Notes listed and transmitted hereby, the
Certificate(s) must be endorsed or accompanied by appropriate bond power(s),
signed exactly as the name(s) of the registered owner appear(s) on the
Certificate(s), and also must be accompanied by such opinions of counsel,
certifications and other information as the Company or the Trustee for the
CapRock Notes may require. Signature(s) on such Certificate(s) or bond power(s)
must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If McLeodUSA Notes or
Certificates for CapRock Notes not exchanged are to be issued in the name of a
person other than the signer of this Letter of Transmittal, or are to be sent to
someone other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed. In the case of issuance in a different name, the taxpayer
identification number of the person named must also be indicated. Holders
tendering CapRock Notes by book-entry transfer may request that CapRock Notes
not exchanged be credited to such account maintained at DTC as such holder may
designate. If no such instructions are given, CapRock Notes not exchanged will
be returned by mail or, if tendered by book-entry transfer, by crediting the
account indicated above maintained at DTC.
7. IRREGULARITIES. The Company will determine, in its sole discretion,
all questions as to the form of documents, validity, eligibility (including time
of receipt) and acceptance for exchange of any tender of CapRock Notes, which
determination shall be final and binding on all parties. The Company reserves
the absolute right, in its sole and absolute discretion, to reject any and all
tenders determined by it not to be in proper form or the acceptance for exchange
of which may, in the view of counsel to the Company, be unlawful. The Company
also reserves the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The Exchange
Offer--Conditions to the Exchange Offer" or any defect or irregularity in any
tender of CapRock Notes of any particular holder whether or not similar defects
or irregularities are waived
<PAGE>
in the case of other holders. The Company's interpretation of the terms and
conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) will be final and binding. No tender of CapRock
Notes will be deemed to have been validly made until all defects or
irregularities with respect to such tender have been cured or waived. Neither
the Company, any affiliates of the Company, the Exchange Agent, or any other
person shall be under any duty to give any notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth above. Additional copies of the Prospectus, the
Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained from
the Exchange Agent or from your broker, dealer, commercial bank, trust company
or other nominee.
9. BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered CapRock Notes are accepted for exchange is
required to provide the Exchange Agent with such holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue Service (the
"IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with respect to CapRock Notes exchanged
pursuant to the Exchange Offer may be subject to 31% backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 3 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the CapRock Notes or of the last transferee appearing on the transfers attached
to, or endorsed on, the CapRock Notes. If the CapRock Notes are registered in
more than one name or are not in the name of the actual owner, consult the
Instructions to Form W-9 (Request for Identification Number and Certification)
for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the Instructions to Form W-9 (Request for Identification Number
and Certification) for additional guidance on which holders are exempt from
backup withholding.
<PAGE>
Backup withholding is not an additional U.S. federal income tax.
Rather, the U.S. federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. MUTILATED, LOST, DESTROYED OR STOLEN CERTIFICATES. If any
Certificate representing CapRock Notes has been mutilated, lost, destroyed or
stolen, the holder should promptly notify the Exchange Agent. The holder will
then be instructed as to the steps that must be taken in order to replace the
Certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing mutilated, lost, destroyed or
stolen Certificates have been followed.
11. SECURITY TRANSFER TAXES. Holders who tender their CapRock Notes
for exchange will not be obligated to pay any transfer taxes in connection
therewith, except that if McLeodUSA Notes are to be delivered to, or are to
be issued in the name of, any person other than the registered holder of the
CapRock Notes tendered, or if a transfer tax is imposed for any reason other
than the exchange of CapRock Notes in connection with the Exchange Offer,
then the amount of any such transfer tax (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such transfer tax or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer
tax will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF),
TOGETHER WITH CERTIFICATES REPRESENTING TENDERED CAPROCK NOTES OR A BOOK
ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY
THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
<PAGE>
TO BE COMPLETED BY ALL TENDERING SECURITY HOLDERS:
(SEE INSTRUCTION 9)
PAYER'S NAME: UNITED STATES TRUST COMPANY OF NEW YORK
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<S> <C> <C>
PART 1--PLEASE PROVIDE YOUR TIN SOCIAL SECURITY NUMBER OR
ON THE LINE AT RIGHT AND CERTIFY BY SIGNING EMPLOYER IDENTIFICATION NUMBER
SUBSTITUTE AND DATING BELOW
FORM W-9 -------------------------------------
DEPARTMENT OF THE
TREASURY PART 2--CERTIFICATION--Under penalties of perjury, I certify that:
INTERNAL REVENUE (1) The number shown on this form is my correct taxpayer identification
SERVICE number (or I am waiting for a number to be issued to me);
(2) I am not subject to backup withholding either because: (a) I am exempt
from backup withholding; (b) I have not been notified by the Internal
PAYER'S Revenue Service ("IRS") that I am subject to backup withholding as a
REQUEST FOR result of a failure to report all interest or dividends; or (c) the IRS
TAXPAYER'S has notified me that I am no longer subject to backup withholding; and
IDENTIFICATION (3) Any other information provided on this form is true and correct.
NUMBER (TIN)
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return and you have not been
notified by the IRS that you are no longer subject to backup withholding.
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SIGNATURE PART 3--
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DATE Awaiting TIN |_|
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NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES RESULT
IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
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YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not
been issued to me, and either (1) I have mailed or delivered an application to
receive a taxpayer identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office or (2) I intend to mail or deliver
an application in the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all payments made to me on
account of the McLeodUSA Notes shall be retained until I provide a taxpayer
identification number to the Exchange Agent and that, if I do not provide my taxpayer
identification number within 60 days, such retained amounts shall be remitted to the
Internal Revenue Service as backup withholding and 31% of all reportable
payments made to me thereafter will be withheld and remitted to the Internal
Revenue Service until I provide a taxpayer identification number.
SIGNATURE: DATE:
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