FairPoint Communications 2004 Annual Report Download - page 104

In addition, the amended and restated credit facility provides that, on the date occurring 90 days after the last day of each of
our fiscal years commencing December 31, 2003, 50% of excess cash flow (as defined in the amended and restated credit
facility) for the immediately preceding fiscal year shall be applied as a mandatory repayment of the then-outstanding tranche C
term loan facility provided, however, that such requirement shall terminate at such time as (i) we first meet a senior secured
leverage ratio (as defined in the credit facility) of less than or equal to 1.00 to 1.00 and (ii) no default or event of default exists
under the amended and restated credit facility. In March 2004, the Company made an excess cash flow payment of
$3.4 million.
On January 30, 2004, the Company amended its amended and restated credit facility to increase its revolving loan facility
from $70.0 million to $85.0 million and its tranche A term loan facility from $30.0 million to $40.0 million. The Company used
all of the additional borrowing under the tranche A term loan facility and a portion of the borrowings under the revolving loan
facility to repay in full all of the indebtedness under the Carrier Services' senior secured notes. There was no gain or loss on
the extinguishment of this indebtedness.
The Company's amended and restated credit facility allows the Company to request letters of credit to support obligations
of the Company incurred in the ordinary course of business in an aggregate principal amount not to exceed $5.0 million and
subject to limitations on the aggregate amount outstanding under the amended and restated credit facility. As of December 31,
2004, $1.0 million had been issued under this letter of credit.
(b) Fixed Rate and Floating Rate Senior Subordinated Notes Issued in 1998
At December 31, 2004 the Company's restricted covenants on its fixed-rate and floating-rate senior subordinated notes
issued in 1998, its senior subordinated notes issued in 2000, and its senior notes issued in 2003 do not allow the Company to
make any dividend payments.
FairPoint issued $125.0 million aggregate principal amount of senior subordinated notes (the 1998 Fixed-Rate Notes) and
$75.0 million of floating-rate notes (the 1998 Floating-Rate Notes) in 1998. The 1998 Fixed-Rate Notes bear interest at the rate
of 9.5% per annum and the 1998 Floating Rate Notes bear interest at a rate per annum equal to LIBOR plus 418.75 basis
points, in each case payable semiannually in arrears. The LIBOR rate on the 1998 Floating-Rate Notes is determined
semiannually.
The 1998 Fixed-Rate Notes and the 1998 Floating-Rate Notes mature on May 1, 2008. FairPoint may redeem the 1998
Fixed-Rate Notes and the 1998 Floating-Rate Notes at any time, in each case, at the redemption prices stated in the indenture
under which those notes were issued, together with accrued and unpaid interest, if any, to the redemption date. In the event of
a change of control, FairPoint must offer to repurchase the outstanding 1998 Fixed-Rate Notes and the 1998 Floating-Rate
Notes for cash at a purchase price of 101% of the principal amount of such notes, together with all accrued and unpaid interest,
if any, to the date of repurchase.
The 1998 Fixed-Rate Notes and the 1998 Floating-Rate Notes are general unsecured obligations of FairPoint,
subordinated in right of payment to all existing and future senior indebtedness of FairPoint, including all obligations under the
Company's amended and restated credit facility.
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