Exhibit 10.1
SECOND FORBEARANCE AGREEMENT
SECOND FORBEARANCE AGREEMENT, dated as of May 23, 2005 (this
"Agreement"), among (1) McLeodUSA Incorporated, a Delaware corporation (the
"Borrower"), (2) each of the Subsidiaries of the Borrower listed on Schedule I
hereto (the "Subsidiary Guarantors"), (3) the financial institutions named on
the signature pages hereto (together with their respective successors and
assigns, the "Participant Lenders") and (4) JPMorgan Chase Bank, N.A., as agent
for the Lenders (the "Administrative Agent").
WITNESSETH:
A. WHEREAS, the Borrower, certain Participant Lenders, the
Administrative Agent and certain other financial institutions are parties to a
Credit Agreement dated as of May 31, 2000 (as amended, the "2000 Credit
Agreement");
B. WHEREAS, the Borrower, certain Participant Lenders, the
Administrative Agent and certain other financial institutions are parties to a
Credit Agreement dated as of April 16, 2002 (as amended, the "2002 Credit
Agreement," together with the 2000 Credit Agreement, the "Credit Agreements");
C. WHEREAS, the Subsidiary Guarantors and JPMorgan Chase Bank, N.A.,
as Collateral Agent for the Secured Parties, are parties to a Subsidiary
Guarantee Agreement dated as of May 31, 2000, as amended and restated as of
April 16, 2002 (the "Guarantee Agreement");
D. WHEREAS, the Borrower and the Subsidiary Guarantors have proposed a
restructuring plan that is under discussion with the Participant Lenders (as
such plan may be modified, the "Plan");
E. WHEREAS, the Borrower has advised the Administrative Agent and the
Lenders that the Specified Defaults (as defined in section 1(c) below),
including, without limitation, the failure to make scheduled amortization
payments under the Credit Agreements and interest payments under the 2000
Credit Agreement, might occur or continue occurring during the Forbearance
Period (as defined in section 1(a) below);
F. WHEREAS, in order to permit completion of the negotiation of the
Plan and exploration of other possible strategic transactions, the Borrower,
the Subsidiary Guarantors, the Participant Lenders (as defined in the First
Forbearance Agreement) and the Administrative Agent executed a Forbearance
Agreement, dated as of March 16, 2005 (the "First Forbearance Agreement"),
pursuant to which the Participant Lenders (as defined in the First Forbearance
Agreement) and the Administrative Agent agreed to forbear from exercising
certain default-related remedies against the Borrower and the Subsidiary
Guarantors on account of the Specified Defaults (as defined in the First
Forbearance Agreement) for a limited period of time and upon the terms and
conditions set forth therein;
G. WHEREAS, on March 29, 2005 the Borrower retained Xxxxxxx & Marsal,
LLC as an adviser of the Borrower to validate and provide information regarding
the Borrower and its Subsidiaries to the Lenders, prospective buyers and other
parties, and to assist the Borrower in developing strategies relating to any
restructuring or other strategic transactions (the "Restructuring Adviser");
H. WHEREAS, in order to permit completion of the negotiation of the
Plan and further exploration of other possible strategic transactions, the
Borrower and the Subsidiary Guarantors have asked the Participant Lenders, and
the Participant Lenders are willing, to continue to forbear from exercising
certain default-related remedies against the Borrower and the Subsidiary
Guarantors on account of the Specified Defaults for a further limited period of
time and upon the terms and conditions set forth herein;
I. WHEREAS, the Borrower paid to the Administrative Agent, and has
periodically replenished, an advance of $1.5 million (the "Advance") in
accordance with section 2(e) of the First Forbearance Agreement, on account of
the Borrower's obligations to pay expenses and other amounts (including the
fees and expenses of counsel and financial advisors) under sections 9.03 of the
Credit Agreements; and
J. WHEREAS, the Forbearance Period under and as defined in the First
Forbearance Agreement (the "First Forbearance Period") came to an end on May
23, 2005.
NOW, THEREFORE, in consideration of the foregoing, the covenants and
conditions contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Defined Terms. Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit Agreements has the
meaning assigned to such term in the Credit Agreements. As used in this
Agreement, the following terms have the meanings specified below:
(a) "Forbearance Period" means the period beginning on the date hereof
and ending on the earliest to occur of (any such occurrence being a
"Termination Event"):
(i) July 21, 2005;
(ii) the occurrence of any Event of Default other than a
Specified Default;
(iii) any holder of Indebtedness or other obligations of $7
million or more of the Borrower or any of its Subsidiaries shall take
any action to collect or enforce any claim or to create or enforce any
lien against the Borrower or any of its Subsidiaries, excluding the
making of a demand or the assertion of a claim by a vendor or customer
that is disputed in good faith by the Borrower or such Subsidiary in
the ordinary course of business and with respect to which such vendor
or customer has not obtained a lien or otherwise obtained the ability
to collect or enforce such claim; and
(iv) a breach of any term, condition or representation
contained in this Agreement by the Borrower or the Subsidiary
Guarantors, including without limitation, any failure by the Borrower
or Subsidiary Guarantors to comply with the undertakings in Section 2
hereof.
(b) "Other Assets" means all assets of the Borrower and the Subsidiary
Guarantors other than Guaranteed Obligations Collateral (as defined in the
Security Agreement).
(c) "Specified Defaults" means existing or anticipated Events of
Default, as listed on Schedule II to the First Forbearance Agreement that
occurred during the First Forbearance Period, and as listed in Schedule II
hereto that might occur or continue during the Forbearance Period (as defined
in section 1(a)).
(d) "Steering Committee Members" means those Lenders who are members
of the informal steering committee of Lenders whose names have been provided to
the Borrower in a letter from the Administrative Agent dated as of the date
hereof, as amended from time to time.
Section 2. Acknowledgements and Undertakings.
(a) The Borrower and the Subsidiary Guarantors agree and acknowledge
that certain of the Specified Defaults (as defined in the First Forbearance
Agreement) occurred during the First Forbearance Period and that the Specified
Defaults (as defined in section 1(c)) might occur or continue during the
Forbearance Period (as defined in section 1(a)) and that certain of the
Specified Defaults (as defined in the First Forbearance Agreement) constituted,
and the Specified Defaults (as defined in section 1(c)) should they occur will
constitute material Events of Default.
(b) In addition to the information required to be furnished under the
Loan Documents to the Administrative Agent and the Lenders (and without
prejudice to sections 5.01 or any other provision of the Credit Agreements),
the Borrower shall, as promptly as practicable, provide to the Administrative
Agent and the Steering Committee Members any information reasonably requested
by the Administrative Agent or the Lenders. Without limiting the generality of
the foregoing, the Borrower shall promptly provide to the Administrative Agent
and the Steering Committee Members, in a form acceptable to the Administrative
Agent,
(i) on Tuesday of each week, a detailed forecast of receipts
and disbursements for the Borrower and the Subsidiary Guarantors
providing, on a weekly basis, the Borrower's good faith estimate of
projected receipts and disbursements for the 13 weeks commencing with
the immediately following week, together with a reconciliation of such
forecast against the forecast delivered the previous week and a
reasonably detailed explanation of any variance between the current
forecast and such previously delivered forecast;
(ii) not later than the tenth day following the end of each
calendar month, an operational report, including management's good
faith estimate of receipts and disbursements for such month, the cash
balances of the Borrower and Subsidiary Guarantors as of the end of
such calendar month, and an analysis of performance against projected
performance as set forth in the phased business plan dated March 9,
2005 previously delivered to the Participant Lenders;
(iii) on Monday of each week, a written or oral (in the sole
discretion of the Borrower) update, and at any time on request of the
Administrative Agent, a written update, addressed to the financial
advisor of the Administrative Agent regarding the status of the
Borrower's efforts to sell all or any portion of its business,
including, without limitation, a list of all contacts made with
potential purchasers (including the identities of those contacted and
the dates of such contacts), copies (if in writing) or descriptions
(if not in writing) of any proposals, offers or indications of
interest received by the Borrower or its attorneys or financial
advisors, and any responses thereto by the Borrower or any such
attorney or financial advisor;
(iv) all material information (except for information
previously provided by the Borrower to the Administrative Agent and
the Steering Committee Members) that the Borrower proposes or intends
to disclose to the public as far in advance of such disclosure as
practicable; and
(v) direct access to the officers and employees, and books
and records of the Borrower and its Subsidiaries (including the
Restructuring Adviser retained by the Borrower) to obtain such
information as the Participant Lenders deem reasonably necessary to
evaluate, negotiate and implement any restructuring plan and to verify
and analyze to the reasonable satisfaction of the Participant Lenders
the matters referred to in subparagraphs (i), (ii), (iii) and (iv)
above.
(c) The Restructuring Adviser shall continue to be actively employed
by the Borrower at all times during the Forbearance Period and shall have
direct access to all information, personnel and other resources necessary to
the performance of his or her duties.
(d) The Borrower shall make all scheduled interest payments under the
2002 Credit Agreement at the non-default contract rate.
(e) The Administrative Agent has been paid and shall continue to
retain the Advance as an advance payment in respect of the Borrower's
obligations to pay expenses and other amounts under sections 9.03 of the Credit
Agreements, and shall continue to be entitled to pay such amounts (including
sums payable in respect of expenses or other liabilities incurred or paid by
the Administrative Agent prior to the date hereof) as they come due, including,
without limitation, (i) the reasonable fees and expenses of counsel and
financial advisors provided for in such sections and (ii) travel and other
incidental expenses of Lenders actively participating with the Administrative
Agent in restructuring discussions with the Borrower. The Borrower shall from
time to time, within three Business Days following the receipt of a demand from
the Administrative Agent, make further advances to the Administrative Agent in
order to restore the balance of the Advance held by the Administrative Agent to
$1.5 million.
(f) The Borrower shall furnish to the Administrative Agent prompt
written notice of the occurrence of a Termination Event.
(g) The Borrower and the Subsidiary Guarantors acknowledge and agree
that, under the Credit Agreements, as amended, they are not currently entitled
to request any new Loans or Letters of Credit.
(h) Notwithstanding anything to the contrary in any Loan Document, the
Borrower and the Subsidiary Guarantors, as applicable, shall not, unless the
Required Lenders under each Credit Agreement give their written consent, sell,
transfer or otherwise dispose of any Other Assets, except for sales, transfers
or dispositions entered into (i) in the ordinary course of business or (ii)
after the date hereof with Net Proceeds totaling up to $2 million in the
aggregate; provided that the Borrower may sell the two Citation III airplanes
(tail numbers 800 MC and 890 MC) without consent provided that (x) the Net
Proceeds from each such sale are at least $4 million and (y) the Net Proceeds
are deposited in an account with the Collateral Agent (or, if the Required
Lenders under each Credit Agreement request in writing, applied first, to
prepay Borrowings (as defined in the 2002 Credit Agreement) in an aggregate
amount equal to such Net Proceeds and second, to the extent of any remaining
Net Proceeds, as required by section 2.11(c) of the 2000 Credit Agreement). The
Net Proceeds from the sale of such airplanes shall not be included for the
purpose of calculating the $2 million amount referred to in section 2(h)(ii).
(i) The Required Lenders under each Credit Agreement may, without
prejudice to the rights of the Required Lenders under each Credit Agreement to
refuse or condition their consent in any way, require, as a condition to any
consent to any sale, transfer or disposition of any Guaranteed Obligations
Collateral or Other Assets (including Non-Core Assets) that the Net Proceeds
realized from such sale, transfer or disposition be applied first, to prepay
Borrowings (as defined in the 2002 Credit Agreement) in an aggregate amount
equal to such Net Proceeds and second, to the extent of any remaining Net
Proceeds, as required by section 2.11(c) of the 2000 Credit Agreement.
(j) For the avoidance of doubt, the restrictions on the disposition of
Guaranteed Obligations Collateral contained in section 4.09 of the Security
Agreement while an Existing Agreement Event of Default or a New Agreement Event
of Default (as such terms are defined in the Security Agreement) shall have
occurred and be continuing, shall apply during the Forbearance Period and
remain in full force and effect.
(k) All depository, operating, investment accounts and other accounts
of the Borrower and the Subsidiary Guarantors (in each case other than payroll,
withholding tax and other fiduciary accounts) shall no later than thirty days
after the date hereof be subject to control agreements that are in favor of and
reasonably acceptable to the Administrative Agent ("Control Agreement
Accounts").
(l) The Borrower and the Subsidiary Guarantors agree that as soon as
practicable after and in any event within thirty days from date hereof, they
will open and maintain with the Collateral Agent (or, if approved in writing by
the Collateral Agent, any of its affiliates) an account or accounts to be used
by the Borrower and the Subsidiary Guarantors as their overnight investment
account or other holding account for daily excess funds ("Collateral Agent
Accounts", collectively with the Control Agreement Accounts, "Collateral
Accounts") and will close their existing accounts with U.S. Bancorp and its
affiliates currently used for such purposes.
(m) In any event, and in addition to any other requirements that may
be applicable under the Loan Documents or sections 2(k) and 2(l) above, the
Borrower and the Subsidiary Guarantors shall not at any time after May 31,
2005, maintain more than $5 million of its available cash and cash investments
in the aggregate in accounts that are not Collateral Accounts; provided that
after the expiration of the thirty-day period referred to in sections 2(k) and
2(l) above, no funds shall be maintained in accounts other than the Collateral
Accounts except for the purposes specified in the next sentence. In addition,
funds shall be transferred to payroll, withholding tax and other fiduciary
accounts of the Borrower and the Subsidiary Guarantors solely to the extent
required to cover immediate disbursement needs in respect of employee payroll
incurred and paid in the ordinary course of business and in accordance with
past practice, and, with respect to fiduciary and withholding tax accounts,
solely to the extent necessary to meet legal requirements in respect of such
payroll.
(n) The Borrower and the Subsidiary Guarantors shall use their
reasonable commercial efforts to complete as soon as possible the documentation
of a restructuring reasonably satisfactory to the Required Lenders under each
Credit Agreement.
Section 3. Forbearance.
(a) The Participant Lenders agree that until the expiration of the
Forbearance Period, the Participant Lenders will temporarily forbear (subject
to the terms hereof) from the exercise of their default-related remedies under
the Credit Agreements, Loan Documents or otherwise, against the Borrower and
the Subsidiary Guarantors solely to the extent the availability of such
remedies arises exclusively from the Specified Defaults; provided that the
Borrower and the Subsidiary Guarantors shall comply during the Forbearance
Period with all provisions, limitations, restrictions or prohibitions that
would otherwise be effective or applicable under any of the Loan Documents
during the continuance of any Default or Event of Default; provided further
that the agreement of the Participant Lenders temporarily to forbear shall not
apply to nor preclude any remedy available to the Administrative Agent or the
Lenders in connection with any proceeding commenced under any bankruptcy or
insolvency law, including without limitation, to any relief in respect of
adequate protection or relief from any stay imposed under such law.
(b) Upon a Termination Event, the agreement of the Participant Lenders
hereunder to forbear from exercising their default-related remedies shall
immediately terminate without the requirement of any demand, presentment,
protest or notice of any kind, all of which the Borrower and the Subsidiary
Guarantors hereby waive. The Borrower and the Subsidiary Guarantors agree that
the Administrative Agent and the Lenders may at any time thereafter proceed to
exercise any and all of their respective rights and remedies under any or all
of the Loan Documents and/or applicable law, including, without limitation,
their respective rights and remedies in connection with any or all of the
Defaults and Events of Default, including, without limitation, the Specified
Defaults.
(c) For the avoidance of doubt, nothing herein limits the right of the
Administrative Agent or the Lenders, including during the Forbearance Period,
to take any action to preserve or exercise rights or remedies against parties
other than the Borrower and the Subsidiary Guarantors ("Third Party Rights").
For purposes of the foregoing, the Borrower and the Subsidiary Guarantors
acknowledge and agree that execution and delivery of this Agreement shall
constitute the making of any necessary demand or the giving of any necessary
notice for purposes of preserving and/or permitting the exercise of any such
Third Party Rights of the Administrative Agent and the Lenders.
(d) Execution of this Agreement constitutes a direction by the
Participant Lenders that the Administrative Agent act in accordance with its
terms. Each Participant Lender agrees that, notwithstanding anything to the
contrary in the Credit Agreements, the Administrative Agent shall not be
required to act if directed against the Borrower or the Subsidiary Guarantors
if such action is contrary to the terms of this Agreement.
(e) The Borrower and the Subsidiary Guarantors acknowledge and agree
that the agreement of the Participant Lenders hereunder to forbear from
exercising their default-related remedies with respect to the Specified
Defaults shall not constitute a waiver of such Specified Defaults and that the
Lenders expressly reserve all rights and remedies that the Administrative Agent
and the Lenders now or may in the future have under any or all of the Loan
Documents and/or applicable law in connection with all Defaults and Events of
Default (including without limitation the Specified Defaults).
Section 4. Interest Rate During the Forbearance Period.
(a) For the avoidance of doubt, the parties acknowledge and agree that
if any principal or interest on any Loan or any fee or other amount payable by
the Borrower under the Credit Agreements has not been paid when actually due
during the First Forbearance Period or is not paid when actually due from the
date hereof, in each case whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest in accordance with section
2.13(c) of the Credit Agreements.
(b) Notwithstanding the foregoing, the Participant Lenders are hereby
advised that, during the Forbearance Period (i) the Borrower does not intend to
pay interest in cash on a current basis under the 2000 Credit Agreement, and
(ii) the Borrower intends to pay interest in cash under the 2002 Credit
Agreement only at the pre-default rate.
(c) Any interest accrued under the Credit Agreements that has not been
paid in cash shall compound on each Interest Payment Date until paid.
Section 5. Reference to and Effect upon the Credit Agreements.
(a) Except as expressly set forth herein, all terms, conditions,
covenants, representations and warranties contained in the Credit Agreements,
and any other Loan Document, and all rights of the Administrative Agent and the
Lenders and all obligations of the Borrower and the Subsidiary Guarantors
thereunder, shall remain in full force and effect. The Borrower and the
Subsidiary Guarantors hereby confirm that the Credit Agreements and the other
Loan Documents are in full force and effect.
(b) Except as expressly provided herein, nothing contained in this
Agreement and no action by, or inaction on the part of, any Lender or the
Administrative Agent shall, or shall be deemed to, directly or indirectly (i)
constitute a consent to or waiver of any past, present or future violations of
any provisions of the Credit Agreements, or any other Loan Document, (ii)
amend, modify or operate as a waiver of any provision of the Credit Agreements,
or any other Loan Document, except as expressly set forth herein, of any right,
power or remedy of the Administrative Agent or any Lender thereunder or (iii)
constitute a course of dealing or other basis for altering any obligations of
the Borrower under the Loan Documents, or any other contract or instrument.
(c) This Agreement shall constitute a Loan Document.
Section 6. Representations and Warranties. To induce the
Administrative Agent and the Participant Lenders to execute and deliver this
Agreement, the Borrower and the Subsidiary Guarantors represent and warrant
that:
(a) The execution, delivery and performance by the Borrower and the
Subsidiary Guarantors of this Agreement have been duly authorized by all
necessary corporate action. This Agreement constitutes the legal, valid and
binding obligations of the Borrower and the Subsidiary Guarantors, enforceable
against the Borrower and the Subsidiary Guarantors in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
(b) No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Borrower or the Subsidiary Guarantors of this
Agreement.
(c) As of the Forbearance Effective Date (as defined in section 12
below), no Defaults or Events of Default exist, other than the Specified
Defaults.
(d) Schedule III hereto lists all depository, operating, and investment
accounts maintaine by the Borrower and the Subsidiary Guarantors.
Section 7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
Section 8. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
Section 9. Severability. The invalidity, illegality or
unenforceability of any provision in or obligation under this Agreement in any
jurisdiction shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement
or of such provision or obligation in any other jurisdiction.
Section 10. Further Assurances. The Borrower and the Subsidiary
Guarantors agree to take all further actions and execute all further documents
as the Administrative Agent may from time to time reasonably request to carry
out the transactions contemplated by this Agreement.
Section 11. Notices. All notices, requests and demands to or upon the
respective parties hereto shall be given in accordance with sections 9.01 of
the Credit Agreements.
Section 12. Effectiveness. This Agreement shall become effective, and
shall supersede the terms and conditions of the Forbearance Agreement where
such terms and conditions conflict with this Agreement, as of the date hereof
on the date (the "Forbearance Effective Date") when the following conditions
are satisfied:
(a) the Administrative Agent shall have received from the Borrower,
the Subsidiary Guarantors, and the Required Lenders under each Credit Agreement
a counterpart hereof signed by such party or facsimile or other written
confirmation (in form satisfactory to the Administrative Agent) that such party
has signed a counterpart hereof;
(b) the Administrative Agent shall have received certificates of the
chief financial officer of the Borrower and the Subsidiary Guarantors
certifying that, to the best of his knowledge, the representations and
warranties made by the Borrower and the Subsidiary Guarantors pursuant to
section 6 of this Agreement are true and correct on and as of the date of this
Agreement; and
(c) the Borrower shall have fully replenished the Advance referred to
in section 2(e) above to restore it to a balance of $1.5 million.
Section 13. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 14. No Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Subsidiary
Guarantors, the Administrative Agent and the Lenders and their respective
successors and assigns; provided that the Lenders (other than the Participant
Lenders and their respective successors and assigns) shall not be bound by the
forbearance granted hereunder. No Person other than the parties hereto and any
other Lender and their successors and assigns shall have any rights hereunder
or be entitled to rely on this Agreement, and all third-party beneficiary
rights (other than the rights of any other Lender and its successors and
assigns) are hereby expressly disclaimed.
Section 15. Limitation on Assignments. In addition to, and without
limiting the requirements set forth in sections 9.04 of the Credit Agreements,
each Participant Lender agrees that it will not assign all, or any ratable
part, of its Loans, Commitments or other rights or obligations under the Loan
Documents to any Person (other than a Participant Lender) unless such Person
shall have agreed to be bound by this Agreement (including the forbearance
granted hereunder). Each Participant Lender agrees that, notwithstanding
anything to the contrary in the Credit Agreements, the Administrative Agent
shall be entitled to withhold its consent to, and shall not be required to give
effect to, any purported assignment of such Participant Lender's Loans,
Commitments or other rights or obligations under the Loan Documents if the
conditions set forth in the previous sentence are not satisfied.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written. MCLEODUSA INCORPORATED
MCLEODUSA INCORPORATED
By: /s/ G. Xxxxxxx Xxxxxxxxxx
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Name: G. Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MCLEODUSA HOLDINGS, INC.
By: /s/ G. Xxxxxxx Xxxxxxxxxx
-------------------------------------------
Name: G. Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MCLEODUSA TELECOMMUNICATIONS
SERVICES, INC.
By: /s/ G. Xxxxxxx Xxxxxxxxxx
-------------------------------------------
Name: G. Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MCLEODUSA NETWORK SERVICES, INC.
By: /s/ G. Xxxxxxx Xxxxxxxxxx
-------------------------------------------
Name: G. Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MCLEODUSA PURCHASING L.L.C.
By: /s/ G. Xxxxxxx Xxxxxxxxxx
-------------------------------------------
Name: G. Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
MCLEODUSA INFORMATION SERVICES, INC.
By: /s/ G. Xxxxxxx Xxxxxxxxxx
-------------------------------------------
Name: G. Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
JPMorgan Chase Bank NA
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Print Name of Lender
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Managing Director
Bayerische Hypo-und Vereinsbank AG
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Print Name of Lender
By: /s/ Xxxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Director
Bayerische Hypo-und Vereinsbank AG
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Print Name of Lender
By: /s/ Xxxxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Managing Director
Banc of America Strategic Solutions, Inc.
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Print Name of Lender
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By: /s/ Xxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
Commonwealth of Massachusetts Pension
Reserves Investment Management Board
Pension Investment Committee of General
Motors for General Motors Employees
Domestic Group Pension Trust
Fidelity Management Trust Company, as
Investment Advisor
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Print Name of Lender
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
Fidelity Advisor Series I: Fidelity Advisor
Leveraged Company Stock Fund
Fidelity Securities Fund: Fidelity Leveraged
Company Stock Fund
Fidelity Advisor Series II: Fidelity Advisor
High Income Advantage Fund
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Print Name of Lender
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Assistant Treasurer
Jefferies & Co., Inc.
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Print Name of Lender
By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
Sapphire Special Opportunities Fund, LLC
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Print Name of Lender
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By: /s/ Xxxx X. XxXxxx
-------------------------------------
Name: Xxxx X. XxXxxx
Title: Attorney-in-fact
Maryland Distressed Opportunities Fund, LLC
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Print Name of Lender
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By: /s/ Xxxx X. XxXxxx
-------------------------------------
Name: Xxxx X. XxXxxx
Title: Attorney-in-fact
Maryland Distressed Opportunities Fund
I-B, LLC
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Print Name of Lender
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By: /s/ Xxxx X. XxXxxx
-------------------------------------
Name: Xxxx X. XxXxxx
Title: Attorney-in-fact
Maryland Distressed Opportunities Fund
I-C, LLC
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Print Name of Lender
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By: /s/ Xxxx X. XxXxxx
-------------------------------------
Name: Xxxx X. XxXxxx
Title: Attorney-in-fact
Wayland Recovery Fund, LLC
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Print Name of Lender
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By: /s/ Xxxx X. XxXxxx
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Name: Xxxx X. XxXxxx
Title: Attorney-in-fact
Wayzata Recovery Fund, LLC
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Print Name of Lender
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By: /s/ Xxxx X. XxXxxx
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Name: Xxxx X. XxXxxx
Title: Attorney-in-fact
Xxxxxxx Xxxxx Credit Products, LLC
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Print Name of Lender
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By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
Citigroup Financial Products, Inc.
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Print Name of Lender
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By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
Credit Suisse, Cayman Branch
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Print Name of Lender
By: /s/ Xxxxxxx X. Xxxxxxxx/Xxxxxx Xxxxxx
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Name: Xxxxxxx X. Xxxxxxxx/Xxxxxx
Xxxxxx
Title: Managing Director/Director
AIMCO CDO Series 2000-A
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Print Name of Lender
By: /s/ Xxxxx Xxxxxxx/Xxxxx X. Xxxxxxx
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Name: Xxxxx Xxxxxxx/Xxxxx X. Xxxxxxx
Title: Authorized Signatory/
Authorized Signaotry
Allstate life Insurance Company
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Print Name of Lender
By: /s/ Xxxxxxx X. Xxxxxxxx/Xxxxxx Xxxxxx
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Name: Xxxxxxx X. Xxxxxxxx/Xxxxxx
Xxxxxx
Title: Managing Director/Director
Maryland Distressed Opportunities Fund I-C, LLC
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Print Name of Lender
By: /s/ Xxxx X. XxXxxx
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Name: Xxxx X. XxXxxx
Title: Attorney-in-fact
SCHEDULE I
Subsidiary Guarantors
1. McLeodUSA Holdings, Inc.
2. McLeodUSA Telecommunications Services, Inc.
3. McLeodUSA Network Services, Inc.
4. McLeodUSA Purchasing L.L.C.
5. McLeodUSA Information Services, Inc.
SCHEDULE II
SPECIFIED DEFAULTS
1. Section 2.05(j). Any Default or Event of Default occurring under either
Credit Agreement as a result of the failure by the Borrower to deposit
cash in an account with the Administrative Agent pursuant to Section
2.05(j) of such Credit Agreement.
2. Section 2.09. Any Default or Event of Default occurring under the 2000
Credit Agreement as a result of the failure by the Borrower to pay to the
Administrative Agent for the account of each Lender when due the then
unpaid principal amount of each Term Loan of such Lender as provided in
Section 2.10 of the 2000 Credit Agreement.
3. Section 2.10. Any Default or Event of Default occurring under the 2000
Credit Agreement as a result of the failure by the Borrower to repay Term
Loans on the dates set forth in Section 2.10 of the 2000 Credit Agreement.
4. Section 2.13. (a) Any Default or Event of Default occurring under the 2000
Credit Agreement as a result of the failure by the Borrower to pay accrued
interest on the dates and/or in the amounts specified in Section 2.13 of
the 2000 Credit Agreement.
(b) Any Default or Event of Default occurring under the 2002 Credit
Agreement as a result of the failure by the Borrower to pay on a current
cash pay basis that portion of the interest representing the default rate
interest required by Section 2.13(c) of the 2002 Credit Agreement.
5. Section 5.01(a). Any Default or Event of Default occurring under either
Credit Agreement as a result of the failure by the Borrower for the 2004
fiscal year to furnish to the Administrative Agent and each Lender
financial statements reported on by independent public accountants of
nationally recognized standing without a "going concern" or like
qualification or exception and without any qualification or exception as
to the scope of audit, as required by Section 5.01(a) of such Credit
Agreement.
6. Section 5.01(d). Any Default or Event of Default occurring under either
Credit Agreement as a result of the failure by the Borrower to furnish to
the Administrative Agent and each Lender a certificate of accounting firm
as required by Section 5.01(d) of such Credit Agreement with respect to
the 2004 fiscal year financial statements due under section 5.01(a).
7. Section 5.01(e). Any Default or Event of Default occurring under either
Credit Agreement as a result of the failure by the Borrower to furnish to
the Administrative Agent and each Lender a budget as required by Section
5.01(e) of such Credit Agreement.
8. Section 5.02(a). Any Default or Event of Default occurring under either
Credit Agreement as a result of the failure by the Borrower to furnish to
the Administrative Agent and each Lender prompt written notice of any
Specified Default.
9. Section 6.13. Any Default or Event of Default occurring after the
Forbearance Effective Date under either Credit Agreement as a result of
the failure by the Borrower to satisfy the requirements of Section 6.13 of
such Credit Agreement.
10. Section 6.17. Any Default or Event of Default occurring after the
Forbearance Effective Date under either Credit Agreement as a result of
the failure by the Borrower to satisfy the requirements of Section 6.17 of
such Credit Agreement.
11. Article VII, clause (a). Any Default or Event of Default occurring under
either Credit Agreement of the type described in clause (a) of Article VII
of such Credit Agreement arising from the failure to make any payment when
due after the Forbearance Effective Date.
12. Article VII, clause (b). (a) Any Default or Event of Default occurring
under the 2000 Credit Agreement of the type described in clause (b) of
Article VII of such Credit Agreement arising from the failure to pay
interest when due after the Forbearance Effective Date.
(b) Any Default or Event of Default occurring under the 2002 Credit
Agreement of the type described in clause (b) of Article VII of such
Credit Agreement, but solely to the extent of the additional interest, if
any, required to be paid hereunder and pursuant to Section 2.13(c) of the
2002 Credit Agreement.
13. (a) Any Default or Event of Default occurring under the 2000 Credit
Agreement as a result of a Specified Default occurring under the 2002
Credit Agreement, or (b) any Default or Event of Default occurring under
the 2002 Credit Agreement as a result of a Specified Default occurring
under the 2000 Credit Agreement.
14. Any Default or Event of Default occurring under either Credit Agreement as
a result of the failure by any Subsidiary Loan Party to make any required
payments under the Subsidiary Guarantee Agreement during the Forbearance
Period as a consequence of another Specified Default.
SCHEDULE III
All Depository, Operating, and Investment Accounts Maintained
by the Borrower and the Subsidiary Guarantors
Account # Account Description
US Bank: # 520005649 McLeodUSA Inc.-CDA
# 121372734 McLeodUSA Inc. - Corporate Concentration
# 121372742 McleodUSA Telecommunication Services Inc. - Telco Deposits
# 121375646 McLeodUSA Network Services - Network Deposits
# 121376362 McLeodUSA Inc. - Payroll Disbursements
# 196631766 McLeodUSA Inc. - Accounts Payable Disbursements
# 196455994125 McLeodUSA Inc. - Certain Tax Disbursements
# 296400127902 McLeodUSA Inc. - Commercial Paper Sweep
US Bank: # 111115062700 McLeodUSA Inc. - Money Market
US Bancorp: # 23208044 McLeodUSA Inc. Telecommunication Services Inc.
- Limited Stock Sales
Xxxxx Fargo: # 300-0967979 McleodUSA Inc. Telecommunication Services Inc.
- Telco Deposits (ATS)
JPMorgan
Chase Bank: # 0541-00000000 McLeodUSA Inc. - Cash Collateral
