Exhibit 4.1


 


SECOND AMENDMENT dated as of
April 21, 2004 (this “Amendment”) to the Credit Agreement dated as of
April 16, 2002 (as amended, supplemented or otherwise modified from time to
time, the “Credit  Agreement”) among MCLEODUSA
INCORPORATED, a Delaware corporation (the “Borrower”), the lenders from
time to time party thereto (the “Lenders”) and 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, as 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.  Effective as of the Effective Date (as
defined in Section 3 hereof), the Credit Agreement is amended as follows:


 


(a)  Amendment of Section 5.01.  Section 5.01(g) of the Credit Agreement
is hereby amended by restating clause (ii) thereof in its entirety as follows:


 


“(ii) on or prior to May 14, 2004,
a financial forecast of the Borrower and its Restricted Subsidiaries covering
the period from April 1, 2004 through December 31, 2004, prepared to show
information on a monthly basis and”


 


(b)  Amendment of Section 6.13.  Section 6.13 of the Credit Agreement is
hereby amended in its entirety as follows:


 


“SECTION
6.13.  Minimum Consolidated EBITDA
and Leverage Ratio.  The Borrower
(a) will not permit Consolidated EBITDA for any period set forth below (in
each case, taken as a single accounting period) to be less than the amount set
forth opposite such period below:


 


	
  Period

  	
   

  	
  Minimum
  Consolidated

  EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2004 through March 31, 2004

  	
   

  	
  $

  	
  8,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2004 through June 30, 2004

  	
   

  	
  $

  	
  16,000,000

  	
   

  



 

















 


	
  January 1, 2004 through September 30, 2004

  	
   

  	
  $

  	
  24,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2004 through December 31, 2004

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2004 through March 31, 2005

  	
   

  	
  $

  	
  49,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2004 through June 30, 2005

  	
   

  	
  $

  	
  69,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2004 through September 30, 2005

  	
   

  	
  $

  	
  89,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2005 through December 31, 2005

  	
   

  	
  $

  	
  114,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 and thereafter

  	
   

  	
  Not Applicable;

  	
   

  



 


and (b) shall not permit the
Leverage Ratio to exceed 4.00 to 1.00 on any date on or after January 1,
2006.”


 


(c)  Amendment of Section 6.14.  Section 6.14 of the Credit Agreement is
amended to read 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
year ending December 31, 2004, $75,000,000 (ii) with respect to the fiscal years
ending December 31, 2005, $100,000,000, and (iii) with respect to fiscal
years ending December 31, 2006 and thereafter, $200,000,000 (the
applicable amount under clause (i), (ii) or (iii), 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 6.17.  Section 6.17 is amended in its entirety as
follows:


 


“SECTION 6.17.
Interest Expense Coverage Ratio. 
The Borrower will not permit the ratio of (a) Consolidated EBITDA to (b)
Consolidated Cash Interest Expense, in each case for any period of four
consecutive fiscal quarters ending during any period set forth below, to be
less than the ratio set forth opposite such period:  


 


	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2004 through March 31, 2005

  	
   

  	
  1.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2005 through June 30, 2005

  	
   

  	
  1.50 to 1.00

  	
   

  



 


2

















 


	
  July 1, 2005 through September 30, 2005

  	
   

  	
  2.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2005 through December 31, 2005

  	
   

  	
  2.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2006 and thereafter

  	
   

  	
  2.50 to 1.00.”

  	
   

  



 


(e)  Amendment of Section 6.18.  The table set forth in Section 6.18 of the
Credit Agreement is hereby amended in its entirety as follows:


 


	
  “Period

  	
   

  	
  Minimum

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2004 through March 31, 2004

  	
   

  	
  $

  	
  825,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2004 through June 30, 2004

  	
   

  	
  $

  	
  780,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2004 through September 30, 2004

  	
   

  	
  $

  	
  760,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1, 2004 through December 31, 2004

  	
   

  	
  $

  	
  770,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2005 and thereafter

  	
   

  	
  Not Applicable.”

  	
   

  



 


SECTION
2.  Limitation on Borrowings.  The Borrower agrees that (i) for the
period from April 1, 2004 through June 30, 2004 the total Revolving
Exposure shall not exceed $75,000,000 in the aggregate at any time outstanding
and (ii) for the period from July 1, 2004 through September 30,
2004 the total Revolving Exposure shall not exceed $90,000,000 in the aggregate
at any time outstanding.  The Borrower
further agrees that it will not request any Borrowing or request the issuance
of any Letter of Credit that would result in the total Revolving Exposure
exceeding the then applicable amount set forth in the preceding sentence, and
that any such request delivered during such period shall be ineffective.


 


SECTION
3.  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


 


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(c)  this Amendment has been duly executed and
delivered by the Borrower and each of this Amendment 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
4.  Conditions to Effectiveness.  This Amendment shall become
effective on the date (the “Effective Date”) on which each of the
following conditions has been satisfied (or would by the Administrative Agent):


 


(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 3
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 (as defined below); and


 


(d)  the Amendment, dated the date hereof, to the
Borrower’s credit agreement dated as of May 31, 2000 shall have become
effective pursuant to its terms.


 


SECTION
5.  Amendment Fee.  The Borrower agrees to pay to the
Administrative Agent, for the account of each Lender (including JPMorgan Chase
Bank) that delivers an executed counterpart of this Amendment prior to 5:00
p.m., New York City time, on April 28, 2004, an amendment fee (the “Amendment
Fee”) in an amount equal to 0.25% of the sum of such Lender’s outstanding
Revolving Exposure and unused Commitments.


 


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 


 


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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.


 


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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,

  
	
   

  	
  individually and as Administrative Agent,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by:

  	
   

  
	
   

  	
   

  	
   

  	
      /s/ John Kowalczuk

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John Kowalczuk

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
						



 


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