Exhibit 4.1
EXECUTION COPY
THIRD AMENDMENT dated as of December 3, 2004 (this
"Amendment"), to the Credit Agreement dated as of
April 16, 2002 (as heretofore amended, the "Credit
Agreement") among MCLEODUSA INCORPORATED, a Delaware
corporation (the "Borrower"), the lenders party
thereto (the "Lenders") and JPMORGAN CHASE BANK, N.A.
(formerly known as JPMorgan Chase Bank), as
Administrative Agent (in such capacity, the
"Administrative Agent") and Collateral Agent.
The Borrower has requested that the Lenders agree to amend certain
provisions of the Credit Agreement. The Lenders party hereto are willing so to
amend the Credit Agreement on the terms and subject to the conditions set forth
herein. Capitalized terms used but not defined herein have the meanings assigned
to them in the Credit Agreement, amended hereby.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amendment of Credit Agreement. Upon effectiveness of this
Amendment in accordance with Section 3 hereof, the Credit Agreement is amended
as follows:
(a) Amendment of Section 1.01. The final sentence of the definition of
"Commitment" in Section 1.01 of the Credit Agreement is amended by redesignating
clauses (i) and (ii) as clauses (iii) and (iv) and adding new clauses (i) and
(ii) to read as follows:
"(i) the Required Lenders shall have consented in writing to the
provision of such Supplemental Commitment, (ii) lenders under the Existing
Credit Agreement holding loans representing more than 50.0% of the total
outstanding loans under the Existing Credit Agreement at such time shall have
consented in writing to the provision of such Supplemental Commitment,"
(b) Amendment of Section 5.01(g). Section 5.01(g) of the Credit
Agreement is amended as follows: (i) clause (i) is restated in its entirety as
follows: "(i) on or prior to January 31 of each year, a financial forecast of
the Borrower and its Restricted Subsidiaries covering the period from January 1
through December 31 of that year, prepared to show information on a monthly
basis and";
(ii) clause (ii) is deleted;
(iii) clause (iii) is redesignated as clause (ii); and
(iv) the following phrase is deleted from the last sentence: ", and
that the benchmark for the comparative information required under this clause
(g) for the fiscal year 2005 and thereafter shall be the information set forth
in the budget provided under clause (e) for such fiscal year".
(c) Amendment of Section 6.14. Section 6.14 of the Credit Agreement is
amended in its entirety as follows:
"SECTION 6.14. Capital Expenditure Limitation. The Borrower shall not
permit the Capital Expenditures of the Borrower and the Restricted Subsidiaries
for any fiscal year of the Borrower to exceed (i) with respect to the fiscal
years ending December 31, 2004 and 2005, $75,000,000, and (ii) with respect to
the fiscal year ending December 31, 2006, $150,000,000 (the applicable amount
under clause (i) or (ii), the "Capex Limit"). The Capex Limit in respect of any
fiscal year commencing with the fiscal year ending on December 31, 2005, shall
be increased by the amount of unused permitted Capital Expenditures for the
immediately preceding fiscal year (such amount, the "Capex Carryforward");
provided, however, that in no event shall the Capex Limit for any fiscal year be
increased by more than $50,000,000. Any Capex Carryforward that is not permitted
to be used in any fiscal year as a result of the proviso to the preceding
sentence may, subject to such proviso, be applied to any subsequent fiscal
year."
(d) Amendment of Section 6.18. Section 6.18 of the Credit Agreement is
amended as follows:
(i) the line "October 1, 2004 through December 31, 2004", including the
reference to the amount of $770,000,000, is deleted; and
(ii) the date "January 1, 2005" is replaced with the date "October 1,
2004".
SECTION 2. Representations and Warranties. To induce the other parties
hereto to enter into this Amendment, the Borrower represents to each of the
Lenders and the Administrative Agent that, as of the Effective Date:
(a) after giving effect to this Amendment, the representations and
warranties of the Borrower set forth in Article III of the Credit Agreement are
true and correct on and as of the Effective Date with the same effect as if made
on and as of the Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties were true and correct as of such earlier date;
(b) after giving effect to this Amendment, no Default has occurred and
is continuing under the Credit Agreement; and
(c) this Amendment has been duly executed and delivered by the Borrower
and the Credit Agreement, as amended hereby, constitutes a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3. Conditions to Effectiveness. This Amendment shall become
effective as of the date (the "Effective Date") on which each of the following
conditions has been satisfied:
(a) the Administrative Agent shall have received counterparts of this
Amendment that, when taken together, bear the signatures of the Borrower and the
Required Lenders;
(b) the Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the Effective Date, to the effect that
the representations and warranties set forth in Section 2 hereof are true and
correct;
(c) the Borrower shall have paid to the Administrative Agent, in
immediately available funds, for the account of each of the Lenders entitled
thereto, the Amendment Fee referred to in Section 4 hereof;
(d) the Existing Credit Agreement shall have been amended to effect
modifications equivalent to those provided for by this Amendment in respect of
the Credit Agreement, and all conditions to the effectiveness of such amendment
shall have been satisfied on the Effective Date; and
(e) to the extent invoiced, the Administrative Agent shall have
received payment or reimbursement of its reasonable out-of-pocket expenses in
connection with this Amendment and any other out-of-pocket expenses of the
Administrative Agent required to be paid or reimbursed pursuant to the Credit
Agreement, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent.
SECTION 4. Amendment Fee. The Borrower agrees to pay to the
Administrative Agent, for the account of each Lender that delivers (including by
fax) an executed counterpart of this Amendment prior to noon, New York City
time, on December 2, 2004, an amendment fee (the "Amendment Fee") in an amount
equal to 0.125% of the sum of such Lender's outstanding Loans and unused
Commitments.
SECTION 5. Financial Advisor to the Lenders. The Borrower consents to
the retention by counsel for the Administrative Agent of Lazard Freres & Co.,
LLC ("Lazard") as financial advisor to the Administrative Agent and the Lenders,
and the Borrower agrees to pay all reasonable fees, charges and disbursements of
such advisor in connection with such engagement and confirms its agreement that
Section 9.03(a) of the Credit Agreement shall apply thereto, provided that such
financial advisory services are provided by Lazard pursuant to an engagement
letter entered into between Lazard and counsel for the Administrative Agent.
SECTION 6. Effect of Amendment. Except as expressly set forth herein,
this Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, amend, or otherwise affect the rights and remedies of the Lenders or
the Administrative Agent under the Credit Agreement or any other Loan Document
and shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect. This Amendment shall
apply and be effective with respect only to the matters expressly referred to
herein, and nothing herein shall be deemed to entitle the Borrower to a consent
to, or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document in similar or different circumstances. This
Amendment shall constitute a "Loan Document" for all purposes of the Credit
Agreement.
SECTION 7. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 8. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original but all of
which when taken together shall constitute but one and the same instrument.
Delivery of an executed signature page of this Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
SECTION 9. Costs and Expenses. The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in connection
with this Amendment, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent.
SECTION 10. Headings. The headings of this Amendment are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their authorized officers as of the day and year first written
above.
MCLEODUSA INCORPORATED,
by: /s/ G. Kenneth Burckhardt
-----------------------------
Name: G. Kenneth Burckhardt
Title: Executive Vice President
and Chief Financial Officer
JPMORGAN CHASE BANK, N.C.,
Individually and as Administrative Agent,
by: /s/ Susan E. Atkins
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Name: Susan E. Atkins
Title: Managing Director