FairPoint Communications 2007 Annual Report Download - page 97

Table of Contents
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principal amount not to exceed $10.0 million and subject to limitations on the aggregate amount outstanding under the revolving facility.
As of December 31, 2007, a letter of credit had been issued for $1.4 million.
The existing credit facility is guaranteed, jointly and severally, subject to certain exceptions, by all first tier subsidiaries of the
Company. The Company has provided to Deutsche Bank Trust Company Americas, as collateral agent for the benefit of the lenders
under the existing credit facility and certain hedging creditors under permitted hedging agreements, collateral consisting of (subject to
certain exceptions) 100% of the Company’s equity interests in the subsidiary guarantors and certain other intermediate holding company
subsidiaries. Newly acquired or formed direct or indirect subsidiaries of the Company which own equity interests of any subsidiary that
is an operating company will be required to provide the collateral described above.
The existing credit facility contains customary events of default, including but not limited to, failure to pay principal, interest or
other amounts when due, breach of covenants or representations, cross-defaults to certain other indebtedness in excess of specified
amounts, judgment defaults in excess of specified amounts, certain ERISA defaults, the failure of any guaranty or security document
supporting the existing credit facility and certain events of bankruptcy and insolvency.
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FairPoint issued $225.0 million aggregate principal amount of senior notes in 2003 (the 2003 Notes). The 2003 Notes bear interest at
the rate of 117/8% per annum, payable semiannually in arrears.
The 2003 Notes mature on March 1, 2010. FairPoint may redeem the 2003 Notes at any time on or after March 1, 2007 at the
redemption prices stated in the indenture under which the 2003 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 2003 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 2003 Notes are general unsecured obligations of FairPoint, ranking pari passu in right of payment with all existing and future
senior debt of FairPoint, including all obligations under the Company’s amended and restated credit facility, and senior in right of
payment to all existing and future subordinated indebtedness of FairPoint.
The indenture governing the 2003 Notes contains certain customary covenants and events of default.
Of the 2003 Notes, $223.0 million were repaid in 2005 using proceeds from the Company’s initial public offering and borrowings
under the 2005 Senior Secured Notes.
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In conjunction with the senior notes payable to the RTFC and the RTB and the first mortgage notes payable to the Rural Utilities
Service, certain of the Company’s subsidiaries are subject to restrictive covenants limiting the amounts of dividends that may be paid. A
portion of the RTFC notes, the full amount of the RTB notes and notes payable to the Rural Utilities Service were repaid in 2005 using
proceeds from the Company’s initial public offering and borrowings under the 2005 Senior Secured Notes.
The Company also has $0.3 million unsecured demand notes payable to various individuals and entities with interest payable at
5.25% at December 31, 2007 and 2006.
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Series A preferred stock was issued to the lenders in connection with the Carrier Services debt restructuring.
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