FairPoint Communications 2004 Annual Report Download - page 52

net cash proceeds we receive from the issuance of permitted securities and, at certain times if we are not permitted to pay dividends, with
50% of the increase in our cumulative distributable cash (as defined below) during the prior fiscal quarter. Reductions to the revolving
commitments under the credit facility from the foregoing recapture events will not reduce the revolving commitments under the credit facility
below $50.0 million.
 The credit facility provides for voluntary prepayments of the revolver and the term loan and voluntary
commitment reductions of the revolver (and the delayed draw facility), subject to giving proper notice and compensating the lenders for
standard Eurodollar breakage costs, if applicable.
 The credit facility contains financial covenants, including, without limitation, the following tests: a minimum interest
coverage ratio equal to or greater than 3.0:1 and a maximum leverage ratio equal to or less than 5.25:1.
The credit facility contains customary affirmative covenants. The credit facility also contains negative covenants and restrictions,
including, among others, with respect to redeeming and repurchasing our other indebtedness, loans and investments, additional
indebtedness, liens, capital expenditures, changes in the nature of our business, mergers, acquisitions, asset sales and transactions with
affiliates.
 Subject to the second sentence of the first paragraph under "Suspension of Dividend Payments" below, under
the credit facility we are permitted to pay dividends for the period from the closing date of the offering through March 31, 2005. In addition, we
may use all of our Cumulative Distributable Cash accumulated after April 1, 2005 to pay dividends, but we may not in general pay dividends
in excess of such amount.
Set forth below is a summary of certain of the defined terms that are used in the provisions governing the payment of dividends and
mandatory payments during suspension of dividends under our credit facility.
"" means, for any reference period, an amount of cash equal to the sum (which may be negative) of (without
duplication) (I) our Adjusted EBITDA for such reference period minus (II) the sum of (i) our consolidated interest expense during such
reference period, to the extent included in determining such Adjusted EBITDA, (ii) all scheduled, mandatory and voluntary principal
repayments in respect of our indebtedness made during such reference period (other than (x) repayments made during such reference period
with the proceeds of indebtedness, equity issuances, asset sales or insurance recovery events, (y) repayments of revolving and swingline
loans during such reference period, except to the extent resulting in a corresponding reduction of the total revolving commitment in an
amount equal to such repayment) and (z) certain mandatory prepayments of term loans during such reference period, (iii) capital
expenditures made by us in cash during such reference period (other than capital expenditures financed with the proceeds of indebtedness
(other than revolving loans or swingline loans), equity issuances, assets sales and insurance recovery events), (iv) tax payments paid in
cash during such reference period, (v) cash consideration paid by us during such reference period for acquisitions of equity interests and/or
assets comprising a business or product line (whether pursuant to a permitted acquisition or otherwise), except to the extent financed with
the proceeds of indebtedness or issuances of equity, (vi) investments (other than certain excluded investments) made by us during such
reference period, (vii) the cash cost of any extraordinary losses and of any losses on sales of assets (other than in the ordinary course of
business) during such reference period, in any such case to the extent included in determining Adjusted EBITDA for such reference period
and (viii) cash payments made by us during such reference period on account of non-cash losses or non-cash charges accrued or expensed
during or prior to such reference period, plus (III) the sum of (i) the cash amount of any extraordinary gains, and the cash amount realized on
gains
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