Document:

Stock Pledge and Security Agreement

FLEET NATIONAL BANK

STOCK PLEDGE AND SECURITY AGREEMENT

 

THIS STOCK PLEDGE AND SECURITY AGREEMENT is made this 3rd day of April, 2002, by GREEN MOUNTAIN COFFEE ROASTERS, INC. (f/k/a Green Mountain Coffee, Inc.), a Vermont corporation with a principal place of business at 33 Coffee Lane, Waterbury, Vermont 05676 (the "Borrower"), to FLEET NATIONAL BANK, , a national banking association organized under the laws of the United States of America with an address of Mail Stop NH DE 01102A, 1155 Elm Street, Manchester, New Hampshire 03101 (the "Bank").

WITNESSETH:

WHEREAS, pursuant to a certain Fleet Bank - NH Seventh Amendment and First Restatement of Commercial Loan Agreement dated April 12, 1996, as amended by Eighth Amendment to Fleet Bank - NH Commercial Loan Agreement and Loan Documents dated February 19, 1997, Ninth Amendment to Fleet Bank - NH Commercial Loan Agreement and Loan Documents dated June 9, 1997, Tenth Amendment to Commercial Loan Agreement and Loan Documents dated January 15, 1998, Eleventh Amendment to Fleet Bank - NH Commercial Loan Agreement and Loan Documents dated February 19, 1998, Twelfth Amendment to Fleet Bank - NH Commercial Loan Agreement and Loan Documents dated April 7, 2000, Thirteenth Amendment Agreement dated September 17, 2001, and Fourteenth Amendment to Fleet National Bank Commercial Loan Agreement and Loan Documents dated April 3, 2002 (collectively, as amended, the "Loan Agreement"), Bank has extended to the Borrower certain credit facilities (collectively, the "Loans");

WHEREAS, the Borrower is the owner of certain of the outstanding shares (collectively, the "Shares") of the capital stock of Keurig, Incorporated, a Delaware corporation; and

WHEREAS, the obligation of the Bank to make the Loans to the Borrower is subject to the condition, among others, that the Loans and all other obligations of Borrower under the Loan Agreement and the other Loan Documents shall be secured by this pledge and collateral assignment by the Borrower to the Bank of the Shares.  Terms not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.

NOW, THEREFORE, in order to induce the Bank to make the Loans to the Borrower pursuant to and in accordance with the terms and conditions of the Loan Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Borrower, the Borrower hereby covenants and agrees as follows:

1.  Pledge of Shares.  Borrower hereby pledges and collaterally assigns the Shares, and all Income and Proceeds thereof (as hereinafter defined), to the Bank as collateral security for the payment and performance of the Borrower's obligations under the Loan Agreement and the Loan Documents, including, but not limited to, the repayment of the Loans and all interest, charges, and fees with respect thereto.  As used in this agreement, "Income" means all current and future interest, dividends, distributions and other payments and benefits in whatever form with respect to the Shares and "Proceeds" means all proceeds from the sale or other disposition of the Shares.

2.  Delivery of the Shares.  Borrower herewith delivers to the Bank all certificates evidencing the Shares and separate assignments of all of the Shares (whether or not evidenced by certificates) duly executed in blank, together with irrevocable proxies which provide the Bank with full and complete voting power and authority respecting the Shares exercisable however only upon the occurrence of an Event of Default (hereinafter defined).

3.  Grant of Security Interest.  The Borrower hereby grants to the Bank a security interest in the Shares delivered herewith, and in all Income and Proceeds of the foregoing, to secure the payment and performance of the Borrower's obligations to the Bank under the Loan Agreement and the other Loan Documents, including but not limited to repayment of the Loans and all interest, charges, and fees with respect thereto.

4.  Rights Upon Event of Default.  Upon the occurrence of an event of default under, or breach of any of the terms and conditions of, the Loan Agreement or any of the other Loan Documents ("Event of Default"), the Bank shall then have all of the rights and remedies provided to it under said agreements and instruments and, in addition, the right to (a) exercise each and all the rights and privileges of a record holder of the Shares, including without limitation, the right to sell, transfer, or otherwise dispose of the Shares and to retain and/or to collect any and all Income and Proceeds, and (b) exercise all rights of a secured party under the Uniform Commercial Code as in effect in the State of New Hampshire upon the date hereof and under other applicable law, including without limitation private sale of the Shares.  All amounts received by the Bank through the exercise of its rights as aforesaid shall be applied to the extent required to satisfy the obligations of the Borrower under the Loan Agreement and the other Loan Documents.  Any amounts remaining thereafter shall be paid over to Borrower.  

5.  Voting Rights.  Until the occurrence of an Event of Default, the Borrower shall hold and maintain all ownership rights associated with the Shares, including the right to vote said Shares on any corporate question.  

6.  Protection of Shares.  Borrower shall pay all taxes, charges and assessments against the Shares and do all acts necessary and appropriate to preserve and maintain the value thereof.  In the event of the failure of the Borrower to do so, Bank may make such payments and take such actions on account thereof as it, in its sole discretion, deems desirable.  Borrower shall reimburse Bank immediately on demand for each and all such payments and any costs so incurred.  

7.  Power of Attorney.  Borrower hereby irrevocably appoints the Bank as Borrower's attorney-in-fact, with full power of substitution, to, upon the occurrence of an Event of Default (a) take any and all actions in Borrower's names and stead with respect to the Shares, (b) sell, transfer, assign, or otherwise dispose of the Shares, (c) demand, collect, receive, receipt for, and recover all Income and Proceeds, and (d) execute in Borrower's name and to deliver any necessary documents and instruments required with respect to the Shares necessary for the exercise of the Bank's rights hereunder.  

8.  Representations and Warranties of Borrower.  Borrower represents and warrants that as of the date hereof:  

(a)  Borrower is the sole owner of the Shares and has the right, authority and capacity to pledge, transfer, assign, and grant a security interest in and to all right, title and interest in and to the Shares pursuant to this assignment;

(b)  The Shares constitute all of the capital stock of Keurig, Incorporated owned by the Borrower;

(c)  The Shares are not subject to any right, security interest, lien, encumbrance or adverse claim of any third party except the interest of the Bank arising under this agreement;

(d)  This agreement and consummation of the transactions set forth herein do not violate or constitute a breach of any indenture, agreement or undertaking to which Borrower is a party or by which Borrower is bound, or of any laws, statutes and regulations of the United States or any state or political subdivision thereof to which Borrower may be subject; 

(e)  Except for this agreement, the Stock Rights Agreement, dated as of February 4, 2002, among Keurig and holders of Keurig's Series B Convertible Redeemable Preferred Stock and Series C Convertible Redeemable Preferred Stock, the Voting Agreement, dated as of February 4, 2002 among Keurig and holders of Keurig's Series B Convertible Redeemable Preferred Stock and Series C Convertible Redeemable Preferred Stock and a Shareholder Rights Agreements, dated as of April   , 2002 among Keurig, MD Co., and Borrower (which Borrower anticipates entering into), there are no restrictions upon the sale, transfer or assignment of any of the Shares; and

(f)  The execution, delivery and performance hereof by Borrower are not in contravention of any prior obligation of Borrower or any obligation with respect to the Shares.

9.  Waivers.  Borrower assents to any extension, modification or waiver of any obligation of Borrower.  No waiver or modification of any of the provisions hereof shall be binding on Bank unless in writing and signed by Bank and no waiver by Bank of any rights it may have hereunder shall be deemed a waiver of any other rights it may have.  All rights and remedies of Bank shall be cumulative and may be exercised singly or concurrently.

10.  Costs.  Borrower shall pay all costs including, without limitation, reasonable attorneys' fees, incurred by Bank in protecting, enforcing or releasing any of its rights hereunder.

11.  Additional Documents.  Upon the request of Bank, Borrower will execute and deliver such further documents and take such further action as Bank may reasonably request in order to fully effect the purposes of this agreement and to protect its rights hereunder.  Upon satisfaction of all of the Borrower's obligations to the Bank under the Loan Agreement and the other Loan Documents, and the termination of this agreement, the Bank shall deliver the Shares to the Borrower.  

12.  Miscellaneous.

(a)  This agreement shall be interpreted under and construed in accordance with the laws of the State of New Hampshire.

(b)  Any notice or other communications required or permitted hereunder shall be in writing and shall be given as provided in the Loan Agreement.

(c)  This agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

(d)  This agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns, and may not be changed or modified except by an instrument in writing signed by the party to be charged therewith. 

SIGNATURE PAGE FOLLOWS:

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this agreement as of the date first above written.  

BORROWER:

GREEN MOUNTAIN COFFEE ROASTERS, INC.

 By: s/s Robert D. Britt

Robert D. Britt

Vice President - Finance/Treasurer

 

FLEET NATIONAL BANK 

 By: s/s Kenneth R. Sheldon

Kenneth R. Sheldon

Vice PresidentQuickLinks
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Exhibit 10.61    
  

 
 

INDEMNITY AGREEMENT
  
    BETWEEN
  
    MCLEODUSA INCORPORATED
  
    AND
  

                                         
       
  
    DATED AS OF
  

                                         
           

 
 

TABLE OF CONTENTS    
  

	1.	 	CERTAIN DEFINITIONS	 	1
	 	 	1.1.    Change in Control	 	1
	 	 	1.2    Claim	 	2
	 	 	1.3.    Expenses	 	2
	 	 	1.4.    Indemnifiable Event	 	2
	 	 	1.5.    Reviewing Party	 	2
	 	 	1.6.    Voting Securities	 	2
	 	 	1.7.    Special Independent Counsel	 	2
	

2.	
 	

BASIC INDEMNIFICATION ARRANGEMENT	
 	

2
	

3.	
 	

CHANGE IN CONTROL	
 	

4
	

4.	
 	

INDEMNIFICATION FOR ADDITIONAL EXPENSES	
 	

4
	

5.	
 	

LIMITATIONS ON SETTLEMENT AUTHORITY IN SOME CASES	
 	

4
	

6.	
 	

PARTIAL INDEMNITY, ETC.	
 	

4
	

7.	
 	

NO PRESUMPTION	
 	

5
	

8.	
 	

NON-EXCLUSIVITY, ETC.	
 	

5
	

9.	
 	

LIABILITY INSURANCE	
 	

5
	

10.	
 	

PERIOD OF LIMITATIONS	
 	

5
	

11.	
 	

AMENDMENTS, ETC.	
 	

5
	

12.	
 	

SUBROGATION	
 	

6
	

13.	
 	

NO DUPLICATION OF PAYMENTS	
 	

6
	

14.	
 	

BINDING EFFECT, ETC.	
 	

6
	

15.	
 	

SEVERABILITY	
 	

6
	

16.	
 	

GOVERNING LAW	
 	

6

 
 
 

INDEMNITY AGREEMENT    
  

        This Indemnity Agreement (this "Agreement") is entered into
as                        , between McLeodUSA Incorporated, a Delaware corporation (the "Corporation"), and
                        ("Director") [("Officer")] (1)/, a director of the Corporation. 

        WHEREAS,
both the Corporation and Director recognize the increased risk of litigation and other claims being asserted against public companies in today's environment; 

        WHEREAS,
basic protection against undue risk of personal liability of the Corporation officers and directors is expected to be provided through insurance coverage providing reasonable
protection at reasonable cost, and Director expects such coverage to be available, but as a result of substantial changes in the marketplace for such insurance it has become increasingly more
difficult to obtain such insurance on terms providing reasonable protection at reasonable cost; 

        WHEREAS,
the Corporation's Amended and Restated Certificate of Incorporation (the "Certificate") and/or Amended and Restated Bylaws (the "Bylaws") require the Corporation to indemnify
and advance expenses to its directors and officers to the full extent permitted by law, and Director has been serving as a director or executive officer of the Corporation in part in reliance on such
provisions; 

        WHEREAS,
in recognition of Director's need for substantial protection against personal liability in order to insure and enhance Director's continued service to the Corporation in an
effective manner, and Director's reliance on the aforesaid provisions in the Corporation's Certificate and/or Bylaws, and in part to provide Director with specific contractual assurance that the
protection promised by such provisions will be available to Director (regardless of, among other things, any amendment to or revocation of such provisions of the Certificate and/or Bylaws, any change
in the composition of the Corporation's Board of Directors or the occurrence of any acquisition transaction relating to the Corporation), the Corporation wishes to provide in this Agreement for the
effective indemnification of and the advancing of expenses to Director to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained, for the continued coverage of Director under the Corporation's director and officer liability insurance policies; 

        [Global
change of Director to Officer should be made if this Agreement is to be used for an officer. Hereinafter, all references will be to Director or director.] 

        NOW
THEREFORE, in consideration of the premises, and intending to be legally bound hereby, the parties hereto agree as follows: 

1.    CERTAIN DEFINITIONS 

        1.1.    Change in Control    

        A
"Change in Control" shall be deemed to have occurred if (i) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of
Directors of the Corporation and any new director whose election by the Board of Directors or nomination for election
by the Corporation's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (ii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting
Securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the 

1

 

Corporation approve a plan of complete liquidation and dissolution of the Corporation or an agreement for the sale or disposition by the Corporation (in one transaction or a series of transactions)
of all or substantially all the Corporation's assets; provided, however, that a would-be Change in Control under (ii) herein which is approved and recommended in advance by the
Corporation's Board of Directors shall not be deemed a Change in Control. 

        1.2    Claim    

        A
"Claim" is any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation (whether conducted by the Corporation or any other party) that Director in
good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other. 

        1.3.    Expenses    

        "Expenses"
include attorneys' fees and all other costs, expenses and obligations paid or incurred by or on behalf of Director (other than amounts paid or payable directly or indirectly
to Director or any person or entity controlled by Director) in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a
witness in or participate in any Claim relating to any Indemnifiable Event. 

        1.4.    Indemnifiable Event    

        An
"Indemnifiable Event" shall be any event or occurrence related to the fact that Director is or was a director, officer, employee, agent or fiduciary of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee, trustee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of anything done or not done by Director in any such capacity. 

        1.5.    Reviewing Party    

        A
"Reviewing Party" shall be any appropriate person or body consisting of a member or members of the Corporation's board or directors or any other person or body selected hereunder
(including Special Independent Counsel, as defined below) who is not a party to the particular Claim for which Director is seeking indemnification. If there has not been Change in Control, the
Reviewing Party shall be selected by the Corporation's Board of Directors. If there has been such a Change in Control, the Reviewing Party shall be Special Independent Counsel. 

        1.6.    Voting Securities    

        "Voting
Securities" are any securities of the Corporation which vote generally in the election of directors. 

        1.7.    Special Independent Counsel    

        "Special
Independent Counsel" is counsel selected by Director and approved by the Corporation (which approval shall not be unreasonably withheld) and who has not, unless waived by the
Corporation and Director, otherwise performed services for the Corporation or Director within the last ten years. 

2.    BASIC INDEMNIFICATION ARRANGEMENT 

        (a)  In
the event Director was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a
Claim by reason of (or arising in 

2

 

part out of) an Indemnifiable Event, the Corporation shall indemnify Director to the fullest extent permitted by law as soon as practicable but in any event no later than thirty days after written
demand is presented to the Corporation, against any and all Expenses, judgments, fines, penalties and amounts paid or owing in settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines, penalties or amounts paid in settlement) paid or incurred by or on behalf of Director in connection with such Claim.
Director shall give the Corporation written notice of all such Claims and the particulars thereof as soon as practicable. 

        (b)  If
so requested by Director, the Corporation shall advance (within two business days of such request) any and all Expenses to Director (an "Expense Advance"). 

        (c)  Notwithstanding
anything in this Agreement to the contrary, (i) Director shall not be entitled to indemnification pursuant to this Agreement in connection with
any Claim (other than a claim for indemnification (including, without limitation, indemnification pursuant to Section 4 of this Agreement), Expense Advances, or expenses advanced pursuant to
Section 4 of this Agreement) initiated by Director against any party (other than the Corporation or any director of officer of the Corporation) unless such Claim was authorized by the Board of
Directors of the Corporation, (ii) prior to a Change in Control, Director shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim (other than a claim
for indemnification (including, without limitation, indemnification pursuant to Section 4 of this Agreement), Expense Advances, or expenses advanced pursuant to Section 4 of this
Agreement) initiated by Director against the Corporation or any director or officer of the Corporation unless the Corporation has joined in or consented to the initiation of such Claim;
(iii) the obligations of the Corporation under Section 2(a) shall be subject to the condition that the Reviewing Party shall not have determined in a writing stating the reasons therefor
that Director would not be permitted to be indemnified under applicable law; and (iv) the obligation of the Corporation to make an Expense Advance pursuant to Section 2(b) shall be
subject to the condition that, if, when and to the extent that the Reviewing Party determines that Director would not be permitted to be so indemnified under applicable law, the Corporation shall be
entitled to be reimbursed by Director (who hereby agrees to reimburse the Corporation) for all such amounts theretofore paid; provided, however, that if Director has commenced legal proceedings in a
court of competent jurisdiction to secure a determination that Director should be indemnified under applicable law, any determination made by the Reviewing Party that Director would not be permitted
to be indemnified under applicable law shall not be binding and Director shall not be required to reimburse the Corporation for any Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). 

        (d)  If
there has been no determination by the Reviewing Party or the Reviewing Party determines that Director would not be permitted to be indemnified in whole or in part
under applicable law (such determination to be made by the Reviewing Party independent of any position of the Corporation on any aspect of the indemnification, including without limitation the
appropriateness of the amount of any settlement), Director shall have the right to commence litigation in any court in the State of Delaware or in the State(s) of Director's residence or employment,
having subject matter jurisdiction thereof, and in which venue is proper, seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect
thereof, and the Corporation hereby consents to service of process and to appear in any such proceeding. The Corporation and Director hereby agree that Director's remedies at law are inadequate in the
event Director commences litigation to recover indemnification, Expense Advances, or expenses to be advanced pursuant to Section 4 of this Agreement, in each case withheld by the Corporation.
Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Corporation and Director. 

3

 

3.    CHANGE IN CONTROL 

        If
there is a Change in Control of the Corporation, then with respect to all matters thereafter arising concerning the rights of Director to indemnity payments and Expense Advances under
this Agreement or any other agreement, or under the Corporation's Certificate and/or Bylaws now or hereafter in effect, relating to Claims for Indemnifiable Events, the Corporation shall seek legal
advice only from Special Independent Counsel. Such counsel, among other things, shall render its written opinion to the Corporation and Director as to whether and to what extent Director would be
permitted to be indemnified under applicable law. The Corporation agrees to pay the reasonable fees of the Special Independent Counsel referred to above and to fully indemnify such counsel against any
and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 

4.    INDEMNIFICATION FOR ADDITIONAL EXPENSES 

        The
Corporation shall indemnify Director against any and all expenses (including attorneys' fees) and, if requested by Director, shall, within two business days of such request, advance
such expenses to Director, which are incurred by or on behalf of Director (other than amounts paid or payable directly or indirectly to Director or any person or entity controlled by Director) in
connection with any claim asserted against or action brought by Director for (i) indemnification hereunder or advance payment of Expenses by the Corporation under this Agreement (or any other
agreement or the Corporation's and/or Bylaws now or hereafter in effect) relating to Claims for Indemnifiable Events, and/or (ii) recovery under any director and officer liability insurance
policies maintained by the Corporation, regardless of whether Director ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may
be. 

5.    LIMITATIONS ON SETTLEMENT AUTHORITY IN SOME CASES 

        (a)  If
no Change in Control has occurred, Director shall not independently negotiate settlement without first giving the Reviewing Party and the Corporation twenty business
days' notice. Thereafter, Director may engage in such negotiations and may settle the case unless the Reviewing Party and trial counsel for the Corporation handling the case (and in cases where
outside counsel is used, such outside counsel) advise Director that they have investigated the Director's involvement in the event and have determined that the matter is appropriate and legal for
indemnity and all judgments, expenses and costs will, if lawful, be paid by the Corporation; provided, however, that such limitation on settlement negotiations shall not apply to actions by or in the
right of the Corporation against Director. The Reviewing Party and such counsel shall also promptly give Director notice of any subsequent change or reversal of any such prior determination of the
Reviewing Party and such counsel, stating the reasons for such change or reversal, after which notice Director may independently negotiate and settle the case. 

        (b)  In
any case, the Corporation shall not unreasonably withhold its consent to any proposed settlement. 

6.    PARTIAL INDEMNITY, ETC. 

        If
Director is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof, the Corporation shall nevertheless indemnify Director for the portion thereof to which Director is entitled. Moreover,
notwithstanding any other provision of this Agreement, to the extent that Director has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, 

4

 

Director shall be indemnified against all Expenses incurred in connection therewith. In connection with any determination by the Reviewing Party as to whether Director is entitled to be indemnified
hereunder, the burden of proof shall be on the Corporation to establish that Director is not so entitled. 

7.    NO PRESUMPTION 

        For
purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that Director did not meet any particular standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law. The termination of a suit by settlement shall be presumed to be a disposition favorable to Director and in the best interests of the
Corporation. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Director has met any particular standard of conduct or had any particular belief, nor an
actual determination by the Reviewing Party that Director has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Director to secure a
judicial determination that Director should be indemnified under applicable law shall be a defense to Director's claim or create a presumption that Director has not met any particular standard of
conduct or did not have any particular belief. 

8.    NON-EXCLUSIVITY, ETC. 

        The
rights of Director hereunder shall be in addition to any other rights Director may have under the Corporation's Certificate, Bylaws, the Delaware General Corporation Law or any other
law or agreement. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently, it is the
intent of the
parties hereto that Director shall enjoy by this Agreement the greater benefits so afforded by such change. 

9.    LIABILITY INSURANCE 

        To
the extent the Corporation maintains an insurance policy or policies providing director and officer liability insurance, Director shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage available for any the Corporation director or officer. 

10.  PERIOD OF LIMITATIONS 

        No
legal action shall be brought and no cause of action shall be asserted by or on behalf of the Corporation or any affiliate of the Corporation against Director, Director's spouse,
heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Corporation or its
affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action, such shorter period shall govern. 

11.  AMENDMENTS, ETC. 

        No
supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 

5

 

12.  SUBROGATION 

        In
the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Director, who shall execute all papers
required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to enforce such
rights. 

13.  NO DUPLICATION OF PAYMENTS 

        The
Corporation shall not be liable under this Agreement to make any payment in connection with any claim made against Director to the extent Director has otherwise actually received
payment (under any insurance policy, the Corporation's Certificate, Bylaws or otherwise) of the amounts otherwise Indemnifiable hereunder. 

14.  BINDING EFFECT, ETC. 

        This
Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Corporation), assigns, spouses, heirs, and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Director continues to serve as an officer or director of the Corporation or of any other enterprise at the Corporation's request. 

15.  SEVERABILITY 

        The
provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a
court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. 

16.  GOVERNING LAW 

        This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such state,
without giving effect to the principles of conflicts of laws. 

	McLEODUSA INCORPORATED	 	 
	

By:	
 	

 	
 	

 
	 	 	
	 	 
	Name:	 	 	 	 
	Title:	 	 	 	 
	

 	
 	

 	
 	

 
	
	 	 
	Name:	 	 	 	 
	Title:	 	 	 	 

6

QuickLinks

Exhibit 10.61

INDEMNITY AGREEMENT BETWEEN MCLEODUSA INCORPORATED AND DATED AS OF

TABLE OF CONTENTS

INDEMNITY AGREEMENT

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