UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 16, 2005
MCLEODUSA INCORPORATED
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-20763 42-1407240
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(Commission File Number) (IRS Employer Identification No.)
McLeodUSA Technology Park
4200 C. Street SW, P.O. Box 3177
Cedar Rapids, IA 52406-3177
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(Address of Principal Executive Offices) (Zip Code)
(319) 364-0000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 16, 2005, McLeodUSA Incorporated ("the Company") and certain of its
subsidiaries ("Subsidiary Guarantors") entered into a Forbearance Agreement,
among the Company, the Subsidiary Guarantors, the lenders thereto ("Lenders"),
and JPMorgan Chase Bank, N.A. ("Agent"), as Administrative Agent (the
"Forbearance Agreement"), which is hereby incorporated by reference and
attached hereto as Exhibit 10.1. The Forbearance Agreement relates to (1) the
Credit Agreement dated as of May 31, 2000, as amended, among the Company, the
Lenders and the Agent (the "Credit Agreement"), (2) the Credit Agreement dated
as of April 16, 2002, as amended, among the Company, the Lenders and the Agent
(the "Exit Facility" and, collectively with the Credit Agreement, the "Credit
Facilities") and (3) the Subsidiary Guarantee Agreement dated as of May 31,
2000, as amended and restated as of April 16, 2002, among the Subsidiary
Guarantors and the Agent.
Pursuant to the Forbearance Agreement, the Lenders have agreed to forbear from
exercising any remedies as a result of certain specified defaults under the
Credit Facilities anticipated by the Company during the forbearance period,
including, without limitation, the failure to make scheduled amortization
payments under the Credit Facilities and interest payments under the Credit
Agreement. The forbearance period, the purpose of which is to enable the
parties to explore possible strategic transactions, runs through May 23, 2005.
Theodore J. Forstmann, director and stockholder of the Company, and a General
Partner in certain funds affiliated with Forstmann Little & Co. which
collectively hold a controlling interest in the Company's voting securities, is
a lender party to the Credit Agreement.
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 16, 2005, the Company announced, among other things, its financial and
operating results for the quarter and total year ended December 31, 2004 in a
press release, a copy of which is attached hereto as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description
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10.1 Forbearance Agreement, dated as of March 16, 2005, among
McLeodUSA Incorporated (the "Borrower"), each of the
Subsidiaries of the Borrower listed on Schedule I thereto (the
"Subsidiary Guarantors"), the financial institutions named on
the signature pages thereto (together with their respective
successors and assigns, the "Participant Lenders") and
JPMorgan Chase Bank, N.A., as agent for the Lenders (the
"Administrative Agent")
99.1 Press Release, dated March 16, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCLEODUSA INCORPORATED
Dated: March 16, 2005 By: /s/ G. Kenneth Burckhardt
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Name: G. Kenneth Burckhardt
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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10.1 Forbearance Agreement, dated as of March 16, 2005, among
McLeodUSA Incorporated (the "Borrower"), each of the
Subsidiaries of the Borrower listed on Schedule I thereto (the
"Subsidiary Guarantors"), the financial institutions named on
the signature pages thereto (together with their respective
successors and assigns, the "Participant Lenders") and
JPMorgan Chase Bank, N.A., as agent for the Lenders (the
"Administrative Agent")
99.1 Press Release, dated March 16, 2005