Earthlink 2011 Annual Report Download - page 113

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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Company classified the Convertible Notes as a current liability in the Consolidated Balance Sheets as of December 31, 2010.
Revolving Credit Facility
General.
On May 20, 2011, the Company entered into a credit agreement (the "Credit Agreement") providing for a senior secured
revolving credit facility with aggregate revolving commitments of $150.0 million. Also on May 20, 2011, EarthLink terminated its $30.0 million
revolving credit facility entered into on March 18, 2011. The senior secured revolving credit facility terminates on May 20, 2015, and all
amounts outstanding thereunder shall be due and payable in full. The Company paid $1.9 million of transaction fees related to the new senior
secured revolving credit facility, which are being amortized to interest expense over the life of the credit facility. Commitment fees and
borrowing costs under this facility vary and are based the Company's most recent Consolidated Leverage Ratio (as defined in the Credit
Agreement). As of December 31, 2011, the Company's Commitment Fee was 0.375% and the Company's borrowing cost was LIBOR plus
2.50% for LIBOR Rate Loans and the Base Rate plus 1.50% for Base Rate Loans. No amounts were outstanding under the senior secured
revolving credit facility as of December 31, 2011. However, $2.0 million of letters of credit were outstanding under the facility as of
December 31, 2011.
Prepayment.
The Company may prepay the senior secured revolving credit facility in whole or in part at any time without premium or
penalty, subject to reimbursement of the lenders' breakage and redeployment costs in the case of prepayment of LIBOR borrowings. The
Company may irrevocably reduce or terminate the unutilized portion of the senior secured revolving credit facility at any time without penalty.
Covenants.
The Credit Agreement contains representations and warranties, covenants, and events of default with respect to the Company
and its subsidiaries that are customarily applicable to senior secured credit facilities. However, such covenants will not apply to ITC^DeltaCom
and its subsidiaries until the earlier of (i) the repayment or refinancing in full of the ITC^DeltaCom Notes or (ii) the date ITC^DeltaCom and its
U.S. subsidiaries become guarantors of the senior secured revolving credit facility. ITC^DeltaCom is not currently a guarantor under the senior
secured revolving credit facility. The negative covenants contained in the Credit Agreement include restrictions on the ability of the Company
and its subsidiaries to, among other things, incur additional indebtedness, incur liens on assets, engage in certain mergers, acquisitions or
divestitures, pay dividends or make other distributions, voluntarily prepay certain other indebtedness (including certain prepayments of the
Company's existing notes and the ITC^DeltaCom Notes), enter into transactions with affiliates, make investments, and change the nature of their
businesses, and amend the terms of certain other indebtedness (including the Company's existing notes and the ITC^DeltaCom Notes), in each
case subject to certain exceptions set forth in the Credit Agreement.
Additionally, the Credit Agreement requires the Company to maintain a maximum consolidated leverage ratio and a minimum consolidated
interest coverage ratio (as defined in the Credit Agreement). As of December 31, 2011, the Company was in compliance with these financial
covenants.
Capital Lease Obligations
The Company maintains capital leases relating to indefeasible right-to-
use agreements, vehicles and equipment. Substantially all of these
capital leases were assumed by the Company through its acquisition of One Communications. Depreciation expense related to assets under
capital leases is included in
106