FairPoint Communications 2002 Annual Report Download
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Table of contents
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Page 1
...or Organization) 521 UAST MORUHUAD STRUUT, SUITU 250 CHARLOTTU, NORTH CAROLINA (Address of Principal UxecKtive Offices) 13-3725229 (I.R.S. Umployer Identification No.) 28202 (Zip code) Registrant's Telephone NKmber, InclKding Area Code:(704) 344-8150. SUCURITIUS RUGISTURUD PURSUANT TO SUCTION 12... -
Page 2
... is volKntarily filing this annKal report on Form 10-K. FAIRPOINT COMMUNICATIONS, INC. ANNUAL RUPORT ON FORM 10-K FOR THU FISCAL YUAR UNDUD DUCUMBUR 31, 2002 ITUM NUMBUR Index... PAGU NUMBUR -------i PART I 1. 2. 3. 4. BKsiness...Properties...Legal Proceedings...SKbmission of Matters to... -
Page 3
... array of services inclKding local voice, long distance, data and Internet primarily to residential cKstomers. According to an indKstry soKrce, we believe that we are the 16th largest local telephone company in the United States, with over 243,000 access lines in service as of December 31, 2002. We... -
Page 4
..., inclKding local voice, long distance, data and Internet services, in oKr markets. In addition, we offer enhanced featKres sKch as caller name and nKmber identification, call waiting, call forwarding, teleconferencing, video conferencing and voicemail. We also offer high-speed Internet access via... -
Page 5
... maintain a recognized and respected brand identity within each of oKr service areas. These inclKde services traditionally associated with local telephone companies, as well as other services sKch as long distance, data and Internet services, and enhanced services. Based on oKr Knderstanding of oKr... -
Page 6
... within a defined "exchange" area. The cKstomer is charged a flat monthly fee for basic service, Ksage charges for local calls and service charges for special calling featKres. Unables long distance companies and other cKstomers to Ktilize oKr local network to originate or terminate intrastate and... -
Page 7
...service areas throKgh resale agreements with national IXCs. In addition, throKgh Carrier Services, we offer wholesale long distance services to other independent telephone companies. CKrrently, we provide long distance services to over forty independent telephone companies in the United States. DATA... -
Page 8
...network infrastrKctKre by offering enhanced services to cKstomers, as well as billing and collection services for IXCs. UNHANCUD SURVICUS. OKr advanced digital switch platform allows Ks to offer enhanced services sKch as call waiting, call forwarding and transferring, call hKnting, three-way calling... -
Page 9
... local access and transport areas, or LATAs, who pay for local phone service and (ii) the IXCs which pay Ks for access to cKstomers located within oKr LATAs. In general, the vast majority of oKr local cKstomers are residential, as opposed to bKsiness, which is typical for rKral telephone companies... -
Page 10
... that coKld be offered by a company competing with an incKmbent local telephone company. The TelecommKnications Act preempts state and local laws that prevent competitive entry into the provision of any commKnications service. However, states can modify conditions of entry into areas served by rKral... -
Page 11
...from network access charges, which are paid to Ks by intrastate carriers and interstate long distance carriers for originating and terminating calls in the regions served by oKr rKral telephone companies. The amoKnt of access charge revenKes that we receive is based on rates set by federal and state... -
Page 12
... telephone companies mKst file tariffs setting forth the terms, conditions and prices for their intrastate services, and sKch tariffs may be challenged by third parties. SKbsidiaries of the Company recently completed rate cases in Vermont and Illinois and have rate cases pending in Kansas and Maine... -
Page 13
...at nondiscriminatory rates and on nondiscriminatory terms and conditions; (iii) offer their retail services for resale at wholesale rates; (iv) provide reasonable notice of changes in the information necessary for transmission and roKting of services over the incKmbent telephone company's facilities... -
Page 14
...carriers. The FCC has stated its intention to develop a long-term plan based on forward-looking costs when the five-year period expires in 2006. The MAG plan creates a new Kniversal service sKpport mechanism, Interstate Common Line SKpport, to replace implicit sKpport for Kniversal service in access... -
Page 15
...continKe to intensify. Internet services, meaning both Internet access (wired and wireless) and on-line content services, are provided by Internet service providers, satellite-based companies, long distance carriers and cable television companies. Many of these companies provide direct access to the... -
Page 16
... 6 employees are employed by Carrier Services. ITUM 2. PROPURTIUS We own all of the properties material to oKr bKsiness. OKr headqKarters is located in Charlotte, North Carolina. We also have administrative offices, maintenance facilities, rolling stock, central office and remote switching platforms... -
Page 17
... stock that coKld be sold pKrsKant to RKle 144 Knder the SecKrities Act or, other than pKrsKant to the Company's registration rights agreement with certain of oKr stockholders, that we have agreed to register Knder the SecKrities Act for sale by the secKrity holders. OKr ability to pay dividends... -
Page 18
... preferred stock dividends and accretion...Net income (loss) attribKtable to common shareholders...OPURATING DATA: RLUC revenKes(4)...AdjKsted RLUC UBITDA(5)...AdjKsted RLUC UBITDA margin(6)...Depreciation and amortization(1)...Capital expenditKres...Total access lines in service...Residential... -
Page 19
... Carrier Services. (5) "UBITDA" means net income (loss) from continKing operations before interest expense, income taxes, and depreciation and amortization. "AdjKsted RLUC UBITDA" means UBITDA of the Company and its sKbsidiaries, adjKsted to exclKde the effects of: (i) changes in the fair valKe... -
Page 20
... array of services inclKding local voice, long distance, data and Internet primarily to residential cKstomers. According to an indKstry soKrce, we believe that we are the 16th largest local telephone company in the United States, with over 243,000 access lines in service as of December 31, 2002. We... -
Page 21
... companies and other cKstomers for access to oKr networks in connection with the origination 18 and/or termination of long distance telephone calls both to and from oKr cKstomers. Intrastate access charges to long distance carriers and other cKstomers are based on access rates filed with the state... -
Page 22
... with the modification of employee stock options by one of oKr execKtive officers. This charge was offset by a non-cash compensation benefit of $0.9 million associated with the redKction in estimated fair market valKe of the stockholder appreciation rights agreements. In JanKary 2000, we recognized... -
Page 23
... operations. Carrier Services will continKe to provide wholesale long distance services and sKpport to oKr RLUC sKbsidiaries and other independent local exchange companies. These services allow sKch companies to operate their own long distance commKnication services and sell sKch services to their... -
Page 24
... in local rates and, where they exist, state Kniversal service fKnds. LONG DISTANCU SURVICUS. Long distance services revenKes decreased $2.8 million from $20.0 million in 2001 to $17.2 million in 2002, all attribKted to redKction in Carrier Services long distance wholesale operations. Wholesale... -
Page 25
... attribKtable to revenKes from oKr wholesale long distance company and $2.6 million was related to the internal growth of oKr earlier acqKired RLUC bKsinesses. We derived oKr revenKes from the following soKrces. LOCAL CALLING SURVICUS. Local calling service revenKes increased $8.4 million from $43... -
Page 26
... in Maine. Intrastate access will continKe to decline in 2002 as additional rate redKctions are reqKired in Maine. LONG DISTANCU SURVICUS. Long distance services revenKes increased $7.2 million, of which $6.2 million is attribKted to new long distance wholesale cKstomers of Carrier Services, and... -
Page 27
...wholesale long distance company. Operating income of oKr earlier acqKired RLUCs decreased $3.4 million as higher expenses (predominately health insKrance costs and legal... or private debt and/or eqKity secKrities or enter into another bank credit facility. OKr ability to make principal payments on ... -
Page 28
...) for approximately $6.1 million; (v) make a capital contribKtion of approximately $1.5 million to Carrier Services, which Ksed these proceeds to retire a portion of its debt; and (vi) pay transaction fees. In May 2002, Carrier Services entered into an amended and restated credit facility with its... -
Page 29
...Stock. The Company is also obligated Knder certain leases of Carrier Services and woKld therefore be obligated to make certain lease and other payments if Carrier Services and/or certain sKblessee's defaKlt on their obligations. See "SKmmary of ContractKal Obligations." Under a tax sharing agreement... -
Page 30
...." (4) Carrier Services has obligations to pKrchase a minimKm amoKnt of wholesale toll minKtes from an interexchange carrier. To date, pKrchases have exceeded the minimKm reqKirements. 27 The following table discloses aggregate information aboKt oKr commercial commitments as of December 31, 2002... -
Page 31
... on oKr ability to: incKr additional debt; pay dividends or distribKtions on, or redeem or repKrchase, capital stock; create liens or negative pledges with respect to oKr assets; make investments, loans or advances, inclKding to Carrier Services; make capital expenditKres; issKe, sell or allow... -
Page 32
... all obligations Knder oKr amended and restated credit facility. The indentKre governing the Company's senior sKbordinated notes and floating rate notes contains certain cKstomary covenants and events of defaKlt. In particKlar, since Carrier Services and its sKbsidiaries are treated as Knrestricted... -
Page 33
.... On May 10, 2002, Carrier Services entered into an amended and restated credit agreement with its lenders to restrKctKre the obligations of Carrier Services and its sKbsidiaries Knder the Carrier Services credit facility. In connection with sKch restrKctKring, (i) Carrier Services paid certain of... -
Page 34
... making sKbstantial payments Knder the tax sharing agreement for taxable income with respect to taxable years 2003 to 2007. Upon a payment defaKlt Knder the Carrier Services amended and restated credit agreement, or in the event of a bankrKptcy of Carrier Services or the Company, at the option... -
Page 35
...of the Series A Preferred Stock at a price per share eqKal to the Preference AmoKnt. Certain holders of the Series A Preferred Stock have agreed with the Company to redKce the dividend rate payable on the shares they hold for a period of two years. On March 6, 2003, Carrier Services entered into the... -
Page 36
...million gain for the extingKishment of certain of Carrier Services' debt and settlement of its interest rate swap agreements. This gain is classified within discontinKed operations. In JKly 2002, the FASB issKed SFAS No. 146, ACCOUNTING FOR COSTS ASSOCIATUD WITH UXIT OR DISPOSAL ACTIVITIUS (SFAS 146... -
Page 37
... approximately $8.6 million 34 at December 31, 2002. The fair valKe indicates an estimated amoKnt we woKld have to pay to cancel the contracts or transfer them to other parties. In connection with oKr credit facility, we Ksed six interest rate swap agreements, with notional amoKnts of $25.0 million... -
Page 38
... CommKnications, Inc.: We have aKdited the accompanying consolidated balance sheets of FairPoint CommKnications, Inc. and sKbsidiaries (the Company) as of December 31, 2001 and 2002, and the related consolidated statements of operations, stockholders' eqKity (deficit), comprehensive income (loss... -
Page 39
... except Note 19 which is as of March 6, 2003 37 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS CONSOLIDATUD BALANCU SHUUTS DUCUMBUR 31, 2001 AND 2002 ASSUTS 2001 2002 AMOUNTS IN THOUSANDS, UXCUPT PUR SHARU DATA) CKrrent assets: Cash...AccoKnts receivable, net of allowance for doKbtfKl accoKnts... -
Page 40
LIABILITIUS AND STOCKHOLDURS' UQUITY (DUFICIT) 2001 2002 AMOUNTS IN THOUSANDS, UXCUPT PUR SHARU DATA) CKrrent liabilities: AccoKnts payable...Other accrKed liabilities...AccrKed interest payable...CKrrent portion of long-term debt...AccrKed property taxes...CKrrent portion of obligation for ... -
Page 41
... FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS CONSOLIDATUD STATUMUNTS OF STOCKHOLDURS' UQUITY (DUFICIT) YUARS UNDUD DUCUMBUR 31, 2000, 2001, AND 2002 (AMOUNTS IN THOUSANDS) SURIUS D PRUFURRUD SHARUS AMOUNT Balance December 31, 1999...Net loss...IssKance of common stock Knder stock options and... -
Page 42
... Balance December 31, 1999...Net loss...IssKance of common stock Knder stock options and warrants...IssKance of capital stock for cash, net of direct offering expenses of $23.9 million...Uxchange of Class A common shares for Class B common and Series D preferred shares...Cancellation of pKt options... -
Page 43
......Deferred patronage dividends...Minority interest in income of sKbsidiaries...Net loss (gain) on sale of investments and other assets...Impairment on investments...Amortization of investment tax credits...Stock-based compensation...Change in fair valKe of interest rate swaps and reclassification... -
Page 44
...) Cash flows from financing activities of continKing operations: Proceeds from issKance of long-term debt...Repayment of long-term debt...Net proceeds from issKance of common stock...RepKrchase of shares of common stock sKbject to pKt options...Loan origination costs...Dividends paid to minority... -
Page 45
... management services to their wholly owned sKbsidiaries. Collectively, the wholly owned sKbsidiaries of STU, VentKres, and Services primarily provide telephone local exchange services in varioKs states. Operations also inclKde resale of long distance services, internet services, cable services... -
Page 46
... the economic effects of rate regKlation 46 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIUS (CONTINUUD) by recording costs and a retKrn on... -
Page 47
... from billing and collection and directory services. The Company earns revenKe from billing and collecting charges for toll calls on behalf of interexchange carriers. The interexchange carrier pays a certain rate per each message billed by the Company. The Company 47 FAIRPOINT COMMUNICATIONS, INC... -
Page 48
...stated at cost. For the investments in partnerships, the eqKity method of accoKnting is Ksed. The investment in Choice One stock is a marketable secKrity classified as available for sale. Non-QKalified Deferred Compensation Plan assets are classified as trading. The Company Kses fair valKe reporting... -
Page 49
... (SFAS No. 144). 49 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIUS (CONTINUUD) As reqKired by SFAS No. 141, the Company adopted the provisions of... -
Page 50
...2004. 50 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIUS (CONTINUUD) (K) IMPAIRMUNT OF LONG-LIVUD ASSUTS Long-lived assets, sKch as property, plant... -
Page 51
... swap agreements. The fair valKe of the Company's interest rate swap agreements is determined from valKations received from financial institKtions. The fair valKe indicates an estimated amoKnt the Company woKld pay if the contracts were cancelled or transferred to other parties. At December 31, 2002... -
Page 52
... of discontinKed operations on the consolidated balance sheet at their respective fair valKes. These interest rate swaps were settled in May 2002 in conjKnction with the restrKctKring of Carrier Services' Credit Facility (see Note 2). 52 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO... -
Page 53
...Had the Company determined compensation cost based on the fair valKe at the grant date for its stock options Knder SFAS No. 123, the Company's net income (loss) woKld have been: DUCUMBUR 31, DUCUMBUR 31, DUCUMBUR 31, 2000 2001 2002 DOLLARS IN THOUSANDS) Net income (loss), as reported...Stock-based... -
Page 54
... in the terms of the Choice One sales agreement was an opportKnity for the Company to earn additional restricted shares of Choice One common stock based on the nKmber of access lines converted to the Choice One operating platform 120 days after closing. In April 2002, Carrier Services earned an... -
Page 55
... operations provided local, long distance, and other commKnication services to cKstomers in markets oKtside of the Company's traditional telephone markets. The Company's reportable segments were strategic bKsiness Knits that offered similar telecommKnications related prodKcts and services in... -
Page 56
.... Of the initial restrKctKring charge, $3.3 million related to employee termination benefits and other employee termination related costs. The Company terminated 360 positions in December 2000. These redKctions resKlted from organizational changes within the operations and sales offices of Carrier -
Page 57
...and other employee termination related costs. The Company terminated 365 positions in JanKary 2001. Certain positions were eliminated at the central operating facility in Albany, New York, and at the corporate office in Charlotte, North Carolina. In addition, another 11 sales offices were closed and... -
Page 58
... Services' internal groKp responsible for web site development and web hosting services. The Company's management Kndertook a review of NetLever and decided to discontinKe sKpporting these web-related services internally. The restrKctKre charge inclKded $0.3 million relating to employee termination... -
Page 59
.... On September 4, 2001, the Company acqKired 100% of the common stock of Marianna. On September 28, 2001, the Company acqKired certain assets of Illinois Consolidated Telephone Company. The aggregate pKrchase price for these acqKisitions was $23.5 million. AcqKisition costs were $1.0 million and... -
Page 60
...) -------276,717 ======== 61 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (4) PROPURTY, PLANT, AND UQUIPMUNT (CONTINUUD) The telephone company composite depreciation rate for property and eqKipment was 7.80... -
Page 61
... Telephone Company...Illinois Valley CellKlar RSA 2--I Ptnrs...Illinois Valley CellKlar RSA 2--II Ptnrs...Illinois Valley CellKlar RSA 2--III Ptnrs...ILLINUT CommKnications, LLC...Orange CoKnty-PoKghkeepsie Limited Partnership...ILLINUT CommKnications of Central IL LLC...Syringa Networks, LLC... -
Page 62
...member interest in United States CellKlar Telephone of Greater TKlsa, 63 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (5) INVUSTMUNTS (CONTINUUD) LLC ("TKlsa, LLC"). BecaKse TKlsa, LLC is the actKal operating... -
Page 63
... of ICT, inclKding its investment in TKlsa, LLC. The RTFC debt balance at December 31, 2002 was $8.4 million. The Company has issKed an KnsecKred gKarantee on the RTFC debt. As of December 31, 2002, the KnsecKred gKarantee was $2.1 million. 64 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO... -
Page 64
..., respectively, for the ChoKteaK CellKlar Telephone Company and Illinois Valley CellKlar RSA 2--I, II and III partnership investments. These charges are classified with the impairment on investments in the consolidated statement of operations. 65 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS... -
Page 65
... rate exposKre Knder the Credit Facility to fixed rates ranging from 8.07% to 10.34%. The expiration dates of the swap agreements range from November 2003 to May 2004. The Credit Facility contains varioKs restrictions, inclKding those relating to payment of dividends by the Company. In management... -
Page 66
... 2002 (6) LONG-TURM DUBT (CONTINUUD) risk by converting the interest cost to a fixed rate of 10.78% for a sKbstantial portion (thoKgh not entirely) of the term of the notes. The swap agreement expires in May 2003. The Fixed Rate Notes are redeemable, in whole or in part, at the option of the Company... -
Page 67
... FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (6) LONG-TURM DUBT (CONTINUUD) CARRIUR SURVICUS' SUNIOR SUCURUD NOTUS On May 10, 2002, Carrier Services entered into an Amended and Restated Credit Agreement with... -
Page 68
...by its long distance bKsiness. 69 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (6) LONG-TURM DUBT (CONTINUUD) Upon an event of defaKlt Knder the new Carrier Services' Amended and Restated Credit Agreement and... -
Page 69
...the Company. The Series A Preferred Stock provides for the payment of dividends at a rate eqKal to 17.428% per annKm. Dividends on the Series A Preferred Stock are payable, at the option of the Company, either in cash or in additional shares of Series A Preferred Stock. The Company has the option to... -
Page 70
... Kpon a percentage of pay of all qKalified personnel and make certain profit sharing contribKtions. ContribKtions to the plans were $0.2 million, $0.2 million, and $0.3 million for the years ended December 31, 2000, 2001, and 2002, respectively. 71 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS... -
Page 71
... existing valKation allowance at December 31, 2002. The amoKnt of the deferred tax assets considered realizable, however, coKld be redKced in the near term if estimates of fKtKre taxable income dKring the carry forward period are redKced. 73 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO... -
Page 72
...dividend, aKthorizing additional classes of capital stock, issKing and reacqKiring capital stock for net proceeds of $158.9 million, the cancellation of pKt options on the Company's common stock, issKing common stock sKbject to pKt obligations related to a bKsiness combination, and recognizing costs... -
Page 73
... consolidated balance sheets. In May 2001, the Company loaned $999,980 to sKch former owners of Fremont. In JanKary 2002, these loans were paid with 76,218 shares sKbject to the pKt options. In JanKary 2003, pKt options on 76,218 shares were exercised for $999,980. 75 FAIRPOINT COMMUNICATIONS, INC... -
Page 74
... agreements. As a resKlt of these transactions, the Company recognized a compensation charge of $8.5 million in 2000. In April 2000, the Company issKed stock options Knder the 1998 Plan to employee participants in the FairPoint CommKnications Corp. Stock Incentive Plan (Carrier Services' Plan... -
Page 75
...Company was nonpKblic on the date of the grant, no assKmption as to the volatility of the stock price was made. 77 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (11) STOCK OPTION PLANS (CONTINUUD) Stock option... -
Page 76
...Company was nonpKblic on the date of the grant, no assKmption as to the volatility of the stock price was made. 78 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS NOTUS TO CONSOLIDATUD FINANCIAL STATUMUNTS (CONTINUUD) DUCUMBUR 31, 2000, 2001, AND 2002 (11) STOCK OPTION PLANS (CONTINUUD) Stock option... -
Page 77
...at December 31, 2002 is 6.8 years. FAIRPOINT COMMUNICATIONS CORP. STOCK INCUNTIVU PLAN In December 1998, the Company adopted the Carrier Services' Plan for employees of its sKbsidiary, Carrier Services. Under the Carrier Services' Plan, participating employees were granted options to pKrchase common... -
Page 78
... expiration date of the offer. As a resKlt of this offer, 3,274,935 options were canceled. The remaining shares oKtstanding Knder this plan were forfeited dKring 2001. On March 13, 2002, 880,819 stock options were issKed Knder this exchange offer. 80 FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS... -
Page 79
... fair valKe of stock options granted Knder the 2000 Plan dKring 2000 and 2002 were $1.85 and $2.84, respectively, on the date of grant Ksing the Black Scholes option-pricing model. InpKt variables Ksed in the model inclKded no expected dividend yields, a weighted average risk free interest rate... -
Page 80
... related to the other than temporary decline in market valKe of investments accoKnted for Knder the eqKity method. DKring the foKrth qKarter of 2002, the Company identified errors in the fair valKe calcKlations of the interest rate swaps and recorded an adjKstment of 82 FAIRPOINT COMMUNICATIONS... -
Page 81
... is estimated Ktilizing a cash flow analysis at a discoKnt rate eqKal to rates available for debt with terms similar to the preferred stock. At December 31, 2002, the Company's carrying valKe and estimated fair valKe of its redeemable preferred stock was $90.3 million and $68.1 million, respectively... -
Page 82
... entered into an Amended and Restated Credit Agreement, dated as of March 6, 2003, among FairPoint, Bank of America, N.A., as syndication agent, Wachovia Bank, N.A., as docKmentation agent, DeKtsche Bank TrKst Company Americas, as administrative agent, and varioKs lending institKtions. The Amended... -
Page 83
... of OPASTCO's finance committee and chairman of the USF committee. PUTUR G. NIXON. Mr. Nixon has served as oKr Chief Operating Officer since November 2002. PrevioKsly, Mr. Nixon was oKr Senior Vice President of Corporate Development from FebrKary 2002 to November 2002 and President of oKr Telecom... -
Page 84
... from 1984 to 2000, in the Charlotte, North Carolina law firm of Underwood Kinsey Warren & TKcker, P.A., where she specialized in general bKsiness matters, particKlarly mergers and acqKisitions. TIMOTHY W. HUNRY. Mr. Henry has served as oKr Vice President of Finance and TreasKrer since December 1997... -
Page 85
...Chief Operating Officer of C-TUC Corporation, a diversified commKnications company, which at the time owned Commonwealth Telephone Company, a 240,000 access line telephone company. Prior to 1985, Mr. Thomas worked at United Telephone Company of Ohio and C&P Telephone in varioKs management capacities... -
Page 86
... Knder the 1995 plan may be incentive stock options, which qKalify for favorable Federal income tax treatment Knder Section 422A of the Internal RevenKe Code, or nonstatKtory stock options. The selection of participants, allotment of shares, determination of price and other conditions of pKrchase of... -
Page 87
...conversion, the Carrier Services stock option plan was terminated. 2000 UMPLOYUU STOCK OPTION PLAN In May 2000, the Company adopted the 2000 Umployee Stock Option Plan. The 2000 Plan provides for grants to members of management of Kp to 10,019,200 options to pKrchase oKr Class A common stock, at the... -
Page 88
... between the exercise price and the fair market valKe of oKr common stock at December 31, 2002. UMPLOYMUNT AGRUUMUNTS In December 2002, we entered into an employment agreement with UKgene B. Johnson, pKrsKant to which we named Mr. Johnson Chief UxecKtive Officer of the Company and/or Chairman... -
Page 89
...sKch agreement no longer own, either directly or indirectly, shares of the Company's capital stock entitling them to 51% in the aggregate of the voting power for the election of the directors of the Company, as a resKlt of a merger or consolidation of the Company, a transfer of the Company's capital... -
Page 90
...accrKed and Knpaid base salary and benefits as of the date of termination. In November 2002, we entered into a letter agreement with each of Peter G. Nixon and Shirley J. Linn. The letter agreements provide that Kpon the termination of their respective employment with the Company withoKt caKse, each... -
Page 91
..., Mr. Weldon and the other members of Thomas H. Lee Advisors, LLC. Uach of sKch persons disclaims beneficial ownership of sKch shares. (10) InclKdes 284,200 shares of Class A common stock issKable Kpon exercise of options that are either cKrrently exercisable or become exercisable dKring the next 60... -
Page 92
... cease to own, at least 10% of the nKmber of shares of oKr stock they held as of JanKary 20, 2002. PKrsKant to these agreements, we pay to each of THL Advisors and Kelso annKal advisory fees of $500,000 payable on a qKarterly basis, we reimbKrse them for oKt of pocket expenses, and we have agreed... -
Page 93
... and commKnicated to the Company's management, inclKding its Chief UxecKtive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding reqKired disclosKre. (B) CHANGUS IN INTURNAL CONTROLS. There have been no significant changes in the Company's internal controls or in... -
Page 94
... in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. /s/ KMPG LLP Omaha, Nebraska FebrKary 19, 2003 99 SCHUDULU II FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIUS VALUATION AND QUALIFYING ACCOUNTS... -
Page 95
... Registrant has dKly caKsed this report to be signed on its behalf by the Kndersigned, thereKnto dKly aKthorized. FAIRPOINT COMMUNICATIONS, INC. By: /s/ WALTUR U. LUACH, JR Name: Walter U. Leach, Jr. Title: Senior Vice President and Chief Financial Officer PKrsKant to the reqKirements of Section... -
Page 96
... of Designation of Series A Preferred Stock of FairPoint.(8) IndentKre, dated as of May 5, 1998, between FairPoint and United States TrKst Company of New York, relating to FairPoint's $125,000,000 9 1/2% Senior SKbordinated Notes dKe 2008 and $75,000,000 Floating Rate Callable SecKrities dKe 2008... -
Page 97
... 6, 2003 by Carrier Services, ST Unterprises, Ltd., FairPoint Broadband, Inc., MJD Services Corp., MJD VentKres, Inc., C-R CommKnications, Inc., Ravenswood CommKnications, Inc. and Utilities Inc.* Amended and Restated Credit Agreement dated as of May 10, 2002 among Carrier Services, varioKs lending... -
Page 98
... Carrier Services Tranche A Term Note.(8) Form of Carrier Services Tranche B Term Note.(8) Form of A Term Note.* Form of C Term Note Floating Rate.* Form of C Term Note Fixed Rate.* Form of RF Note.* Stockholders' Agreement dated as of JanKary 20, 2000 of FairPoint.(1) Registration Rights Agreement... -
Page 99
... by and between FairPoint and Walter U. Leach, Jr.(1) Letter agreement dated as of November 11, 2002 by and between FairPoint and Peter G. Nixon.* Letter agreement dated as of November 13, 2002 by and between FairPoint and Shirley J. Linn.* InstitKtional Stock PKrchase Agreement dated as of JanKary... -
Page 100
..., certify that: 1. I have reviewed this annKal report on Form 10-K of FairPoint CommKnications, Inc. (the "Company"); Based on my knowledge, this annKal report does not contain any KntrKe statement of a material fact or omit to state a material fact necessary to make the statements made, in light of... -
Page 101
...or not material, that involves management or other employees who have a significant role in the Company's internal controls; and 6. The Company's other certifying officer and I have indicated in this annKal report whether or not there were significant changes in internal controls or in other factors... -
Page 102
...or not material, that involves management or other employees who have a significant role in the Company's internal controls; and 6. The Company's other certifying officer and I have indicated in this annKal report whether or not there were significant changes in internal controls or in other factors... -
Page 103
... and Dating...25 Execution and Authentication...26 Registrar and Paying Agent...26 Paying Agent to Hold Money in Trust...27 Securityholder Lists...27 Replacement Securities...27 Outstanding Securities...27 Temporary Securities...28 Cancellation...28 Defaulted Interest...28 CUSIP Numbers...28 ARTICLE... -
Page 104
... Transactions...41 Limitation on Company's Business...41 Change of Control...41 Compliance Certificate...Suits...47 Rights of Holders to Receive Payment...47 Collection Suit by Trustee...47 Trustee May File Proofs of Claim...47 Priorities 48 Undertaking for Costs...48 Waiver of Stay or Extension Laws... -
Page 105
....12 11.13 Communication by Holders with Other Holders...63 Certificate and Opinion as to Conditions Precedent...63 Statements Required in Certificate or Opinion...64 When Securities Disregarded...64 Rules by Trustee, Paying Agent and Registrar...64 Legal Holidays...64 Governing Law...65 No Recourse... -
Page 106
... to be part of this Indenture. vi EXECUTION COPY INDENTURE dated as of March 6, 2003, between FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation (as further defined below, the "Company"), and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee"). Each party agrees... -
Page 107
... used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. For... -
Page 108
... Holders beneficially own, directly or indirectly, in the aggregate a majority of the total voting power of the Voting Stock of such parent corporation); or (b) on or after the first Public Equity Offering that results in a Public Market, if any "Person" or "group" (as such terms are used in... -
Page 109
... shall have approved any plan of liquidation or dissolution of the Company. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMODITY PRICE PROTECTION AGREEMENT" means, in respect of a Person, any forward contract, commodity swap agreement, commodity option agreement or other similar... -
Page 110
... commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (f) net costs associated with Hedging Obligations (including amortization of fees), (g) Disqualified Stock Dividends, (h) Preferred Stock Dividends, (i) interest Incurred in... -
Page 111
...agent, lender or group of lenders. "CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of a Person, any foreign exchange contract, currency swap agreement, currency option or other similar agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates... -
Page 112
...exchangeable at the option of the holder thereof for Debt or Disqualified Stock, on or prior to, in the case of clause (a), (b) or (c), the first anniversary of the Stated Maturity of the Securities. "DISQUALIFIED STOCK DIVIDENDS" means all dividends with respect to Disqualified Stock of the Company... -
Page 113
... DEFAULT" has the meaning set forth in Section 6.01. 8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXCHANGE SECURITIES" means the be issued pursuant to this Indenture additional Initial Securities issued any Registered Exchange Offer or any Rights Agreement. Company's 11... -
Page 114
...advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of such Person), advance or other extension of credit or capital contribution (by means of transfers of cash or other Property to others or payments for Property or services for the... -
Page 115
... Leaseback Transaction). "MOODY'S" means Moody's Investors Service, Inc. or any successor to the rating agency business thereof. "NET AVAILABLE CASH" from any Asset Sale means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to... -
Page 116
... a written opinion from legal counsel. The counsel may be an employee of or counsel to the Company. "ORIGINAL SECURITIES" means the Initial Securities in the aggregate principal amount of $225,000,000 issued on the Issue Date. "PERMITTED ASSET SWAP" means any transfer of property or assets by the... -
Page 117
such agreements are directly related to payment obligations on Debt otherwise permitted by the terms of Section 4.03; (f) Debt in connection with one or more standby letters of credit or performance bonds issued by the Company or a Restricted Subsidiary in the ordinary course of business or pursuant... -
Page 118
...; (g) stock, obligations or other securities received in settlement of debts created in the ordinary course of business and owing to the Company or a Restricted Subsidiary or in satisfaction of judgments; (h) Capital Stock of a Financing Cooperative made through the reinvestment of dividends or... -
Page 119
... workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Debt) or leases to which the Company or any Restricted Subsidiary is party, or deposits to secure public or statutory... -
Page 120
... by the difference between one and the maximum statutory federal income tax rate (expressed as a decimal number between 1 and 0) then applicable to the issuer of such Preferred Stock. "PRINCIPAL" of any Indebtedness (including the Securities) means the principal amount of such Indebtedness plus the... -
Page 121
...the value of any Property shall be its Fair Market Value. "PUBLIC EQUITY OFFERING" means an underwritten public offering of common stock of the Company pursuant to an effective registration statement under the Securities Act. "PUBLIC MARKET" means any time after (a) a Public Equity Offering has been... -
Page 122
...& Poor's Ratings Service or any successor to the rating agency business thereof. "SALE AND LEASEBACK TRANSACTION" means any arrangement relating to Property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary 19 transfers such Property to another Person and the Company or... -
Page 123
...an equity investment made by a Strategic Investor in the Company in an aggregate amount of at least $25.0 million and that results in such Strategic Investor becoming the owner of at least 15.0% of the total issued and outstanding common stock of the Company. "STRATEGIC INVESTOR" means a corporation... -
Page 124
... CODE" means the New York Uniform Commercial Code as in effect from time to time. "UNRESTRICTED SUBSIDIARY" means (a) FairPoint Carrier Services, Inc. (formerly known as FairPoint Communications Solutions Corp.); (b) any Subsidiary of an Unrestricted Subsidiary; and (c) any Subsidiary of the Company... -
Page 125
...Excess Proceeds..."Global Security"..."Guaranteed Obligations"..."legal defeasance option"..."Legal Holiday"..."Offer Amount"..."Offer Period"..."Other Debt"..."Paying Agent"..."Prepayment Offer"..."Private Exchange"..."Purchase Date"..."Registered Exchange Offer"..."Registrar"..."Shelf Registration... -
Page 126
... aggregate principal amount of $225,000,000. With respect to any Securities issued after the Issue Date (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, Original Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06 or Appendix... -
Page 127
... be dated the date of its authentication. The terms of the Securities set forth in Exhibit 1 to Appendix A and Exhibit A are part of the terms of this Indenture. SECTION 2.03 EXECUTION AND AUTHENTICATION. Two Officers shall sign the Securities for the Company by manual or facsimile signature. If an... -
Page 128
... payment (the "Paying Agent"), one of which offices will be maintained for such purpose in The City of New York. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term... -
Page 129
... in exchange for temporary Securities. SECTION 2.10 CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The... -
Page 130
... to be redeemed; 29 (6) that, unless the Company defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the... -
Page 131
... of redemption is mailed, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice and in accordance with the terms thereof. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the... -
Page 132
...Debt issued by the Company to the lenders that are party to the Credit Facility) may be divided and classified in more than one of the types of Debt described in the definition of "Permitted Debt" and Section 4.03(a)(i). SECTION 4.04 LIMITATION ON RESTRICTED PAYMENTS. The Company shall not make, and... -
Page 133
...); PROVIDED FURTHER, HOWEVER, that such dividend shall be included in the calculation of the amount of Restricted Payments; (2) purchase, repurchase, redeem, legally defease, acquire or retire for value Capital Stock of the Company or Subordinated Obligations in exchange for, or out of the proceeds... -
Page 134
... of Restricted Payments; (6) following the first Public Equity Offering that results in a Public Market, pay dividends on the common stock of the Company of up to 6.0% per annum of the cash proceeds (net of underwriters' fees, discounts or commissions) of such first Public Equity Offering; PROVIDED... -
Page 135
... of its Property (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, or any interest therein or any income or profits therefrom, unless (a) if such Lien secures Senior Debt, the Securities are secured on an equal and ratable basis with such... -
Page 136
... Offer remains open (the "Offer Period"), the Company shall deliver to the Trustee for cancellation the Securities or portions thereof that have been properly tendered to and are to be accepted by the Company. The Trustee or the Paying Agent shall, on the Purchase Date, mail or deliver payment... -
Page 137
... at the time the Trustee or the Paying Agent mails or delivers payment therefor to the surrendering Holder. (e) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase... -
Page 138
... of compensation (including amounts paid pursuant to employee benefit plans) for the personal services of officers, directors and employees of the Company or any of the Restricted Subsidiaries, so long as such payments are pursuant to a policy (i) established by the Board of Directors in good faith... -
Page 139
...Stock (other than Disqualified Stock) of the Company; or (7) the payment of customary legal fees and expenses to Paul, Hastings, Janofsky & Walker LLP. SECTION 4.10 LIMITATION ON GUARANTEES BY RESTRICTED SUBSIDIARIES. The Company shall not cause or permit any of its Restricted Subsidiaries, directly... -
Page 140
... Dow Jones News Service or similar business news service in the United States and (ii) send, by first-class mail, with a copy to the Trustee, to each Holder of Securities, at such Holder's address appearing in the Security Register, a notice stating: (A) that a Change of Control Offer is being made... -
Page 141
...Trustee the Securities or portions thereof that have been properly tendered to and are to be accepted by the Company for payment. The Trustee or the Paying Agent shall, on the Change of Control Payment Date, mail or deliver payment to each tendering Holder of the Change of Control Purchase Price. In... -
Page 142
...such default continues for a period of 30 days; (2) the Company defaults in the payment of any principal of, or premium, if any, on any Security when the same becomes due and payable at its Stated Maturity, upon acceleration, redemption, optional redemption, required repurchase or otherwise; (3) the... -
Page 143
..., rule or regulation of any administrative or governmental body. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under... -
Page 144
... and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Securities. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01... -
Page 145
... At least 15 days before such record date, the Company shall mail to each Securityholder and the Trustee a notice that states the record date, the payment date and amount to be paid. SECTION 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in... -
Page 146
...the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit... -
Page 147
... in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co registrar may do the same with like rights. However, the... -
Page 148
...(b). A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting... -
Page 149
... Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall upon payment of its charges hereunder promptly transfer all property held by it as Trustee to the... -
Page 150
... in the case of a corporation included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least $50,000,000 as set forth in its (or its related bank holding company's) most recent published annual report of condition. The Trustee shall... -
Page 151
... of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from the Internal Revenue Service a ruling, or (ii) since the date of this Indenture there has been a change in the applicable Federal income tax law, in... -
Page 152
... shall promptly turn over to the Company upon request any excess money or securities held by them at any time. Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that... -
Page 153
... to such Change of Control Offer or Prepayment Offer. (6) make any Security payable in money other than that stated in the Security; 57 (7) make any change with respect to the ranking of the Securities or any Note Guarantee relative to any other Debt or other obligations of the Company or any... -
Page 154
..., the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the 58 changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS... -
Page 155
...transfer or similar laws affecting the rights of creditors generally. (b) FURTHER AGREEMENTS OF ANY NOTE GUARANTOR. (i) Each Note Guarantor from time to time party hereto hereby waives (to the fullest extent permitted by law) the benefit of diligence, presentment, demand of payment, filing of claims... -
Page 156
... of any other Note Guarantor, the recovery of any judgment against the Company, any action to enforce the same, whether or not a notation concerning its respective Note Guarantee is affixed to any particular Security, any set-off or counterclaim or other reduction whatsoever (whether for taxes or... -
Page 157
... any right to participate in any claim or remedy of any Holder against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, until this Indenture is discharged and all of the Securities and other Guaranteed Obligations are discharged and... -
Page 158
521 East Morehead Street Suite 250 Charlotte, NC 28202 Facsimile: 704-344-8121 Attention: Chief Financial Officer if to the Trustee: The Bank of New York 101 Barclay Street, Floor 8W New York, NY 10286 Facsimile: (212) 815-5707 Attention: Corporate Trust Administration The Company or the Trustee by ... -
Page 159
.... The Registrar and the Paying Agent or coregistrar may make reasonable rules for their functions. SECTION 11.08 LEGAL HOLIDAYS. A "Legal Holiday" is a day on which banking institutions are not required to New York. If a payment date is a Legal Holiday, payment next succeeding day that is... -
Page 160
... successors. "EUROCLEAR" means the Euroclear Bank S.A./N.V. or any successor securities clearing agency. "EXCHANGE OFFER REGISTRATION STATEMENT" means a registration statement of the Company on an appropriate form under the Securities Act with respect to the Registered Exchange Offer, all amendments... -
Page 161
...statement issued by the Company in connection with the offer and sale of Initial Securities or Exchange Securities pursuant to a Registration Rights Agreement. "TRANSFER RESTRICTED SECURITIES" means Definitive Securities and any other Securities that bear or are required to bear the legend set forth... -
Page 162
... restricted securities legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Securities represented thereby with the Securities Custodian, and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and... -
Page 163
...specified by the Company and (3) Exchange Securities for issue only in a Registered Exchange Offer or a Private Exchange pursuant to a Registration Rights Agreement, for a like principal amount of Initial Securities, upon a written order of the Company in the form of an Officer's Certificate for the... -
Page 164
... Security is being transferred (A) to a QIB in accordance with Rule 144A or (B) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and (ii) written instructions directing the Trustee to make, or to direct... -
Page 165
... THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A... -
Page 166
... transferring Holder's Initial Securities. Upon the occurrence of any of the circumstances described in this paragraph, the Company will deliver an Officers' Certificate to the Trustee instructing the Trustee to issue Securities without legends. (iv) Upon the consummation of a Registered Exchange... -
Page 167
... Securities in such Registered Exchange Offer. Upon the occurrence of any of the circumstances described in this paragraph, the Company will deliver an Officers Certificate to the Trustee instructing the Trustee to issue Securities without legends. (v) Upon the consummation of a Private Exchange... -
Page 168
none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary. (v) All Securities issued upon any registration of transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be 76 entitled to... -
Page 169
...[Global Securities Legend] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED... -
Page 170
... WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF... -
Page 171
... OF INITIAL SECURITY] No. 11 7/8% Senior Note due 2010 CUSIP No. FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay to _____, or registered assigns, on March 1, 2010, the principal sum as set forth on the Schedule of Increases and Decreases annexed hereto. Interest Payment Dates... -
Page 172
...be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will make all payments in respect of a certificated Security (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof... -
Page 173
... Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. INDENTURE. The Company issued the Securities under an Indenture dated as of March 6, 2003 (the "Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those... -
Page 174
... SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL. Upon a Change of Control, any Holder of Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or 86 any part of the Securities of such Holder at a purchase price... -
Page 175
...; (vi) to secure the Securities; (vii) to add additional covenants or to surrender rights and powers conferred on the Company; (viii) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; or (ix) to make any change that does not... -
Page 176
...Print or type assignee's name, address and zip code Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her. Date: _____ Your Signature Sign exactly as your name... -
Page 177
... investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee or the Company); or pursuant to another available... -
Page 178
...OF EXCHANGE SECURITY] No. 11 7/8% Senior Note due 2010 CUSIP No. FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay to _____, or registered assigns, on March 1, 2010, the principal sum as set forth on the Schedule of Increases and Decreases annexed hereto. Interest Payment Dates... -
Page 179
... OF REVERSE SIDE OF EXCHANGE SECURITY] 11 7/8% Senior Note due 2010 1. INTEREST. FairPoint Communications, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the... -
Page 180
...be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will make all payments in respect of a certificated Security (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof... -
Page 181
... AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL. Upon a Change of Control, any Holder of Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Securities of such Holder at a purchase price equal to... -
Page 182
... DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes. 11. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written... -
Page 183
...APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to... -
Page 184
... or type assignee's name, address and zip code Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____ as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her. Date: _____ Your Signature Sign exactly as your name... -
Page 185
... Indenture provides that the Company is required to cause the Note Guarantor[s] to execute and deliver to the Trustee a supplemental indenture pursuant to which the Note Guarantor[s] shall guarantee the Securities pursuant to [a] Note Guarantee[s] on the terms and conditions set forth herein and in... -
Page 186
...WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. [NAME OF NOTE GUARANTOR], as Note Guarantor By Name: Title: FAIRPOINT COMMUNICATIONS, INC. By Name: Title: THE BANK OF NEW YORK, as Trustee By Name: Title: 106 -
Page 187
...[Global Securities Legend] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED... -
Page 188
... THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. [FORM OF FACE OF INITIAL SECURITY] No. 11 7/8% Senior Note due 2010 CUSIP No. CUSIP No. FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay to _____, or registered assigns, on March 1, 2010, the principal sum as set forth... -
Page 189
... due 2010 INTEREST FairPoint Communications, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown... -
Page 190
...be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will make all payments in respect of a certificated Security (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof... -
Page 191
... years set forth below: Year ---2007 2008 2009 and thereafter Price ----105.938% 102.969% 100.000% Notwithstanding the foregoing, on or prior to March 1, 2006, the Company may redeem up to 35% of the aggregate principal amount of all Securities theretofore issued, with proceeds of an Equity Sale... -
Page 192
.... The registered Holder of this Security may be treated as the owner of it for all purposes. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed years, the Trustee or Paying Agent shall pay the money back to the at its written request unless an abandoned property law... -
Page 193
... THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to... -
Page 194
... or type assignee's name, address and zip code Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her. Date Your Signature Sign exactly as your name appears... -
Page 195
... if box (4), (5) or (6) is checked, the Trustee may require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in... -
Page 196
... Section 4.07 or 4.14 of the Indenture, check the box: [_] If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.07 or 4.14 of the Indenture, state the amount: $_____ Date Your Signature Sign exactly as your name appears on the other side of the... -
Page 197
... EXCHANGE SECURITY] No. 11 7/8% Senior Note due 2010 CUSIP No. FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation, promises to pay to _____, or registered assigns, on March 1, 2010, the principal sum as set forth on the Schedule of Increases and Decreases annexed hereto. Interest Payment Dates... -
Page 198
...be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will make all payments in respect of a certificated Security (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof... -
Page 199
... AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL. Upon a Change of Control, any Holder of Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Securities of such Holder at a purchase price equal to... -
Page 200
... registered Holder of this Security may be treated as the owner of it for all purposes. 11. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed years, the Trustee or Paying Agent shall pay the money back to the at its written request unless an abandoned property law... -
Page 201
...APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to... -
Page 202
... or type assignee's name, address and zip code Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____ as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her. Date Your Signature Sign exactly as your name appears... -
Page 203
...Boston LLC Eleven Madison Avenue, New York, N.Y. 10010-3629 Ladies and Gentlemen: FairPoint Communications, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to you (the "Initial Purchasers"), upon the terms and subject to the conditions set forth in a purchase agreement dated... -
Page 204
... post-effective amendments. "REGISTERED EXCHANGE OFFER" means the proposed offer to the Holders to issue and deliver to such Holders, in exchange for the Securities, a like principal amount of the Exchange Securities. "REGISTRATION SECURITIES" has the meaning set forth in Section 3(a) hereof... -
Page 205
... or restrictions under the Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States. (c) In connection with the Registered Exchange Offer, the Company shall: (i) mail to each Holder a copy of the Prospectus forming part of... -
Page 206
... amount of Exchange Securities. The Company shall seek to cause the CUSIP Service Bureau to issue the same CUSIP number for such Exchange Securities as for Exchange Securities issued pursuant to the Registered Exchange Offer. 3. SHELF REGISTRATION. If, (i) because of any change in law or applicable... -
Page 207
... acquired in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such Exchange Securities being not "freely tradeable"), then the following provisions shall apply: (a) The Company shall as promptly... -
Page 208
... case of a Shelf Registration Statement, the Holders of securities covered thereby, and, in the case of an Exchange Offer Registration Statement, any Exchanging Dealer that has provided in writing to the Company a telephone or facsimile number and address for notices, and, if requested by you or any... -
Page 209
.... (m) The Company shall use its best efforts to comply with all applicable rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders a consolidated... -
Page 210
..." letter) and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are... -
Page 211
...any underwriting or similar agreement as and to the extent required thereunder. (s) In the case of any Exchange Offer Registration Statement, the Company shall (I) make reasonably available for inspection by each Initial Purchaser, and any attorney, accountant or other agent retained by such Initial... -
Page 212
...) of, as provided in Section 6(d), any underwriters of Securities registered under a Shelf Registration Statement, their officers, directors, employees and agents and each person who controls such underwriters on substantially the same basis as that of the indemnification of the Initial Purchasers... -
Page 213
... total purchase discounts and commissions as set forth on the cover page of the Final Offering Circular, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or Exchange Securities, as applicable, registered under the Act. Benefits received by... -
Page 214
... to Credit Suisse First Boston LLC by fax ((212) 325-8278) and confirmed by mail 16 and effect, the Company persons of to it at Eleven Madison Avenue, New York, New York 10010-3629, attention: Transactions Advisory Group; (ii) if to you, initially at the address set forth in the Purchase Agreement... -
Page 215
... shall have any further liability or obligation under this Agreement. 18 Please confirm that the foregoing correctly sets forth the agreement between the Company and you. Very truly yours, FAIRPOINT COMMUNICATIONS, INC. By: /s/ Shirley J. Linn Name: Shirley J. Linn Title: Vice President, General -
Page 216
... Title: Managing Director ANNEX A Each broker-dealer that receives Exchange Securities for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by... -
Page 217
...it for its own account pursuant to the Registered Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Act and any profit of any such resale of Exchange Securities and any commissions or... -
Page 218
... other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Act. -
Page 219
...AND RESTATED CREDIT AGREEMENT among FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), VARIOUS LENDING INSTITUTIONS, BANK OF AMERICA, N.A., as SYNDICATION AGENT, WACHOVIA BANK, N.A., as DOCUMENTATION AGENT, and DEUTSCHE BANK TRUST COMPANY AMERICAS (f/k/a Bankers Trust Company), as... -
Page 220
......7 Increased Costs, Illegality, etc...8 Compensation...10 Change of Lending Office...10 Replacement of Lenders...10 Incremental Revolving Commitments...11 SECTION 1A. LETTERS OF CREDIT...13 SECTION 2. 2.01 2.02 2.03 SECTION 3. 3.01 3.02 3.03 3.04 SECTION 4. 4.01 FEES...17 Fees...17 Voluntary... -
Page 221
...Property...35 Environmental Matters...35 Labor Relations...35 Subordination...35 AFFIRMATIVE COVENANTS...36 Information Covenants...36 Books, Records and Inspections...37 Insurance...38 Payment of Taxes...38 Company...Capital...40 NEGATIVE COVENANTS...40 Changes in Business...40 Consolidation, Merger, ... -
Page 222
... of Equity Interests...51 Designated Senior Debt...51 EVENTS OF DEFAULT...52 Payments...52 Representations, etc...52 Covenants...52 Default Under Other Agreements...52 Bankruptcy, etc...52 ERISA...53 Pledge Agreement...53 Subsidiary Guaranty...54 Judgments...54 DEFINITIONS...54 THE AGENTS...78... -
Page 223
... RESTATED CREDIT AGREEMENT, dated as of March 30, 1998 and amended and restated as of March 6, 2003, among FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), the Lenders from time to time party hereto, BANK OF AMERICA, N.A., as Syndication Agent... -
Page 224
... hereto wish to amend and restate the Original Credit Agreement in the form of this Agreement to, INTER ALIA, permit the Transaction on the terms and subject to the conditions provided herein and make available to the Borrower the respective credit facilities provided for herein; NOW, THEREFORE, the... -
Page 225
... at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or ...basis of and consistent with such telephonic notice, believed by the Administrative Agent or such Letter of Credit Issuer, as the case may be, in good faith to be from an Authorized Officer... -
Page 226
... amounts shall be made available to the Administrative Agent in Dollars and immediately available funds at the Payment Office and the Administrative Agent promptly will make available to the Borrower by depositing to its account at the Payment Office or as otherwise directed in the applicable Notice... -
Page 227
... as provided in Section 3.02 and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (d) The C Term Note-Fixed Rate issued to each Lender with outstanding C Term Loans-Fixed Rate shall (i) be executed by the Borrower, (ii) be payable to the order of such Lender and be... -
Page 228
... effected by the Borrower giving the Administrative Agent at its Notice Office, prior to 12:00 Noon (New York time), at least three Business Days' (or one Business Day's, in the case of a conversion into Base Rate Loans) prior written notice (or telephonic notice promptly confirmed in writing) (each... -
Page 229
...or prior to 12:00 Noon (New York time) on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans, it shall have the right to elect by giving the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of the... -
Page 230
... that, by reason of any changes arising after the Pre-Closing Start Date affecting the interbank Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate or the making or continuance of any... -
Page 231
...Lender or its parent corporation with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency first made after the Pre-Closing Start Date, has or would have the effect of reducing the rate of return on such... -
Page 232
... charging to the Borrower increased costs materially in excess of those being charged generally by the Lenders, (y) if a Lender becomes a Defaulting Lender and/or (z) in the case of a refusal by a Lender to consent to a proposed change, waiver, discharge or termination with respect to this Agreement... -
Page 233
...fees owing to the Administrative Agent) and the satisfaction of the Incremental Commitment Requirements and any other conditions precedent that may be set forth in such Incremental Revolving Commitment Agreement. The Administrative Agent... the basis of their ...pay to the respective RF Lenders any costs... -
Page 234
...Date issue, for the account of the Borrower and in support of such obligations of the Borrower and/or its Subsidiaries that are incurred in the ordinary course of business or are acceptable to the Administrative Agent and, subject to and upon the terms and conditions herein set forth, such Letter of... -
Page 235
...1A.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower hereby agrees to reimburse the respective Letter of Credit Issuer, by making payment to the Administrative Agent at the Payment Office, for any payment or disbursement made by such Letter of Credit Issuer under any Letter of Credit... -
Page 236
... issued by a court of competent jurisdiction. If the Administrative Agent so notifies any Participant required to fund an Unpaid Drawing under a Letter of Credit prior to 1:00 P.M. (New York time) on any Business Day, such Participant shall make available to the Administrative Agent for the account... -
Page 237
... or a change in the rate of taxes or similar charges), then, upon demand to the Borrower by any Letter of Credit Issuer or such Participant (a copy of which notice shall be sent by such Letter of Credit Issuer or such Participant to the Administrative Agent), the Borrower shall pay to such Letter of... -
Page 238
... charge which such Letter of Credit Issuer is customarily charging for issuances of, payments under or amendments of, letters of credit issued by it. (e) The Borrower shall pay to (x) each Agent on the Restatement Effective Date, for its own account and/or for distribution to the Lenders, such fees... -
Page 239
... thereof to be as set forth in the C Term Notes-Fixed Rate) in whole or in part, without premium or penalty, from time to time on the following terms and conditions: (i) the Borrower shall give the Administrative Agent at the Payment Office written notice (or telephonic notice promptly confirmed in... -
Page 240
..., the Borrower shall pay to the Collateral Agent an amount in cash and/or Cash Equivalents equal to such excess and the Collateral Agent shall hold such payment as security for the obligations of the Borrower in respect of Letters of Credit pursuant to a cash collateral agreement to be entered into... -
Page 241
... finance Permitted Acquisitions (a "REINVESTMENT ELECTION") or (ii) in the case of Net Cash Proceeds from a Non-Core Asset Sale and so long...signed by an Authorized Officer of the Borrower to the Administrative Agent no later than five Business Days following the respective Non-Core Asset Sale stating... -
Page 242
...(net of underwriting discounts and commissions, private placement and/or initial purchaser fees and other reasonable fees and expenses associated therewith) of any sale or issuance of its equity or of any equity contribution (other than equity issued to management and other employees of the Borrower... -
Page 243
... to the Administrative Agent to make a payment from the funds in the Borrower's account at the Payment Office shall constitute the making of such payment to the extent of such funds held in such account. Any payments under this Agreement which are made later than 1:00 P.M. (New York time) shall be... -
Page 244
... a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or W-8BEN... -
Page 245
... and/or make Loans hereunder and the obligation of each Letter of Credit Issuer to issue Letters of Credit hereunder, in each case on the Restatement Effective Date, are subject to the satisfaction of each of the following conditions at such time: (a) EFFECTIVENESS: NOTES. (i) This Agreement shall... -
Page 246
... with any entity not a Credit Party; with all of the foregoing to be reasonably satisfactory to the Administrative Agent. (e) ADVERSE CHANGE, ETC. Since December 31, 2002, nothing shall have occurred, and neither Agent shall have first become aware of any facts or conditions not previously known, in... -
Page 247
... the full amount of the cash proceeds to make payments owing in connection with the Transaction prior to the...FairPoint Carrier Services Credit Agreement and (z) the Administrative Agent shall have received evidence in form, scope and substance reasonably satisfactory to it that the matters set... -
Page 248
...), and of each Letter of Credit Issuer to issue Letters of Credit, is subject, at the time of the making of each such Loan and the issuance of each such Letter of Credit, to the satisfaction of the following conditions: (a) NOTICE OF BORROWING. The Administrative Agent shall have received a Notice... -
Page 249
... and to pay certain fees and expenses relating to the Transaction. (b) The proceeds of RF Loans may be used (x) on the Restatement Effective Date for the purposes described in Section 5.05(a) and (y) for working capital and capital expenditure requirements (including to finance Carrier Services... -
Page 250
...their business. For purposes of this Section 5.10, "DEBT" means any liability on a claim, and "claim" means (i) the right to payment whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or... -
Page 251
...(b) The audited consolidated statements of financial condition of the Borrower and its Subsidiaries at December 31, 2000, December 31, 2001 and December 31, 2002 and the related consolidated statements of income and cash flows and changes in shareholders' equity of the Borrower and its Subsidiaries... -
Page 252
..., insurance contract or fund) is in substantial compliance with its terms and with all applicable laws, including without limitation ERISA and the Code; each Plan which is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service... -
Page 253
... in each class of capital stock of each of its Subsidiaries and also identifies the direct owner thereof. 5.16 INTELLECTUAL PROPERTY. Each of the Borrower and its Subsidiaries owns or holds a valid transferable license to use all the patents, trademarks, service marks, trade names, domain names... -
Page 254
...officer of the Borrower, together with a certificate of such accounting firm stating that in the course of its regular audit of the business of the Borrower and the Intermediary Holding Companies... as customarily prepared by management for its internal use setting forth, with appropriate discussion... -
Page 255
... Date and thereafter annually, upon request of the Administrative Agent, a summary of the insurance carried. 6.04 PAYMENT OF TAXES. The Borrower will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed... -
Page 256
...Lender, the Borrower will deliver to such Lender a complete copy of the annual report (on Internal Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules... -
Page 257
... REPAIR. The Borrower will, and will cause each of its Subsidiaries to, ensure that its material properties and equipment used or useful in its business are kept in good repair, working order and condition, normal wear and tear excepted, and, subject to Section 7.05, that from time to time there... -
Page 258
...or be liquidated into, the Borrower or a Subsidiary Guarantor (so long as the Borrower or such Subsidiary Guarantor is the surviving corporation), or all or any part of its business, properties and assets may be conveyed, sold or transferred to the Borrower or any Subsidiary Guarantor, PROVIDED that... -
Page 259
... Asset Sale, so long as (x) the Net Cash Proceeds therefrom do not exceed $25,000,000 in the aggregate, (y) each such sale is for fair market value and 85...property or asset subject to such Lien; (c) Liens created by or pursuant to this Agreement or the other Credit Documents; (d) Liens created ... -
Page 260
... lesser of the fair market value or purchase price of the property being purchased at the time of the incurrence of such Indebtedness and (z) all Indebtedness secured by Liens created pursuant to this clause (m) (and clause (m) of Section 7.03 of the Original Credit Agreement) (other than Permitted... -
Page 261
...exist in connection with agreements providing for indemnification, purchase price adjustments and similar obligations in connection with Permitted Acquisitions or sales of assets permitted by this Agreement (so long as any such obligations are those of the Person making the respective acquisition or... -
Page 262
...effect thereto; (m) Indebtedness of the Borrower consisting of (i) Carrier Services Back-Stop Letters of Credit and reimbursement obligations with respect thereto, so long as the aggregate outstanding stated amounts of all such letters of credit and reimbursement obligations do not exceed $1,000,000... -
Page 263
... or loan to repay amounts owing under the FairPoint Carrier Services Credit Agreement. 7.07 LIMITATION ON CREATION OF SUBSIDIARIES. The Borrower will not, and will not permit any Subsidiary to, establish, create or acquire any direct Subsidiary; PROVIDED that the Borrower and its Subsidiaries... -
Page 264
... such stock or other equity interests, together with transfer powers duly executed in blank, are delivered to the Collateral Agent and (ii) such new Subsidiary executes a counterpart of the Subsidiary Guaranty (in the case of a new Intermediary Holding Company) and/or the Pledge Agreement (in... -
Page 265
...shareholders, officers, employees, consultants and directors (or their estates) upon the death, permanent disability, retirement or termination of employment of any such Person or otherwise in accordance with any shareholder agreement, stock option plan or any employee stock ownership plan, PROVIDED... -
Page 266
aggregate, (v) arrangements with directors, officers and employees not otherwise prohibited by this Agreement, (vi) payment of customary legal fees and expenses to Paul, Hastings, Janofsky & Walker LLP and (vii) the transactions set forth on Annex VIII hereto. 7.11 INTEREST COVERAGE RATIO. The ... -
Page 267
... Borrower will not permit any of its Subsidiaries, directly or indirectly, to issue any shares of such Subsidiary's capital stock, securities or other equity interests (or warrants, rights or options to acquire shares or other equity interests), except (i) for replacements of then outstanding shares... -
Page 268
...or any of its Material Subsidiaries makes a general assignment for the benefit of creditors; or any Company action is taken by the Borrower or ... the Code or on account of a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or... -
Page 269
...; (iii) enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any and all of the Liens and rights created pursuant to the Pledge Agreement; (iv) terminate any Letter of Credit which may be terminated in accordance with its terms; and (v) direct the Borrower to pay (and the... -
Page 270
... or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. "AGENTS" shall have the meaning provided in the first paragraph of this Agreement. "AGREEMENT" shall mean this Credit Agreement, as amended and... -
Page 271
...C Term Loans, 4.50%. "APPLICABLE PREPAYMENT PERCENTAGE" shall mean, at any time, 50%; PROVIDED that, so long as no Default or Event of Default is then in existence, if on a given Excess Cash Payment Date the Senior Secured Leverage Ratio is less than or equal to 1.00:1.00 (as set forth in an officer... -
Page 272
...that Person. "CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under Capital Leases of the Borrower or any of its Subsidiaries in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP. "CARRIER SERVICES" shall mean [the resale of long distance services]. -
Page 273
... and/or maintenance of Carrier Services. "CASH EQUIVALENTS" shall mean (i) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (PROVIDED that the full faith and credit of the United States of America is pledged... -
Page 274
... under this Agreement and any other long-term indebtedness which would otherwise be included therein. "CONSOLIDATED DEBT" shall mean, as of any date of determination, (i) the aggregate stated balance sheet amount of all Indebtedness of the Borrower and its Subsidiaries on a consolidated basis as... -
Page 275
... commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing and without duplication net costs and/or net benefits under Interest Rate Agreements, but excluding, however, amortization of deferred financing costs to the extent included in... -
Page 276
... have the meaning provided in Section 7.09. "DOCUMENTATION AGENT" shall have the meaning provided in the first paragraph of this Agreement. "DOLLARS" and the sign "$" shall each mean freely transferable lawful money of the United States. "ELIGIBLE TRANSFEREE" shall mean and include a commercial bank... -
Page 277
... institutional "accredited investor" as defined in SEC Regulation D. "ENVIRONMENTAL CLAIMS" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports prepared by... -
Page 278
... CASH PAYMENT DATE" shall mean the date occurring 90 days after the last day of a fiscal year of the Borrower (commencing with the fiscal year of the Borrower ended on December 31, 2003). "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. "EXCLUDED FAIRPOINT CARRIER SERVICES... -
Page 279
... Agreement, i.e., the A Term Facility, the C Term Facility-Fixed Rate, the C Term Facility-Floating Rate or the Revolving Facility. "FACING FEE" shall have the meaning provided in Section 2.01(c). "FAIRPOINT CARRIER SERVICES" shall mean FairPoint Carrier Services, Inc. (formerly known as FairPoint... -
Page 280
... the liability side of the balance sheet of such Person, (iii) the face amount of all letters of credit issued for the account of such Person and, without duplication, all drafts drawn thereunder, (iv) all indebtedness of a second Person secured by any Lien on any property owned by such first Person... -
Page 281
... to such Lender at the direction or request of any regulatory agency or authority. "LENDER REGISTER" shall have the meaning provided in Section 11.16. "LETTER OF CREDIT" shall have the meaning provided in Section 1A.01 (a). "LETTER OF CREDIT FEE" shall have the meaning provided in Section 2.01... -
Page 282
... thereof. "NEW EXCHANGE SENIOR NOTES" shall mean New Senior Notes which are substantially identical securities to the New Senior Notes issued on the Restatement Effective Date, which New Exchange Senior Notes shall be issued pursuant to a registered exchange offer or private exchange offer for the... -
Page 283
...-Core Assets. "NON-CORE ASSETS" shall mean (i) assets of the Borrower and its Subsidiaries not used in their core business of providing local exchange carrier services (e.g., assets used in the operation of the cable television business, cellular telephone business and radio stations) and (ii) the... -
Page 284
... Kelso Affiliate, each THL Affiliate and each Management Affiliate. "PERMITTED LETTERS OF CREDIT" shall mean (i) each standby letter of credit issued by a financial institution acceptable to the Administrative Agent for the account of the Borrower or any of its Subsidiaries in support of obligations... -
Page 285
... Indebtedness of the Borrower that is fully subordinated to the payment in full of all of the Obligations, all of the terms and conditions of which shall be reasonably satisfactory to the Agents. "PERMITTED SWAP TRANSACTION" shall mean a transfer of assets by the Borrower or any of its Subsidiaries... -
Page 286
... 10%. "PROJECTIONS" shall have the meaning provided in Section 4.01(n). "PUC" shall mean a public utility commission, public service commission or any similar agency or commission. "QUALIFIED IPO" shall mean a registered initial public offering of the common stock of the Borrower generating proceeds... -
Page 287
... in Section 11.10. "REVOLVING COMMITMENT" shall mean, with respect to each Lender, the amount set forth opposite such Lender's name in Annex I hereto directly below the column entitled "Revolving Commitment," as the same may be (x) reduced or terminated from time to time pursuant to Section 2.02... -
Page 288
...000 in aggregate. "STATED AMOUNT" shall mean, with respect to any Letter of Credit at any time, the maximum available to be drawn thereunder at such time (regardless of whether any conditions for drawing could then be met). "STE" shall mean ST Enterprises, Ltd., a Kansas corporation. "SUBSIDIARY" of... -
Page 289
... to the interest option applicable thereto i.e., a Base Rate Loan or Eurodollar Loan. "UCC" shall mean the Uniform Commercial Code as in effect from time to time in New York. "UI" shall mean Utilities, Inc., a Maine corporation. "UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if... -
Page 290
... herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Borrower and its Subsidiaries or be required to make any inquiry concerning... -
Page 291
... or under any other Credit Document, in any way relating to or arising out of this Agreement or any other Credit Document; PROVIDED that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements... -
Page 292
..., waiver or consent relating thereto (including, without limitation, the reasonable fees and disbursements of White & Case LLP) and of each Agent, the Collateral Agent, each Letter of Credit Issuer and each of the Lenders in connection with the enforcement of the Credit Documents and the documents... -
Page 293
.... All such notices and communications shall be mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and shall be effective when received. 11.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective... -
Page 294
... Agent on the Lender Register pursuant to Section 11.16. To the extent of any assignment pursuant to this Section 11.04(b) to a Person which is not already a Lender hereunder and which is not a United States Person (as such term is defined in Section 7701 (a)(30) of the Code) for Federal... -
Page 295
... by realization upon security, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans or Fees, of a sum which... -
Page 296
... such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to each Credit Party located outside New York City and by hand delivery to each Credit Party located within New York City, at its address for notices pursuant to Section 11.03, such service... -
Page 297
... shall not in any way affect the meaning or construction of any provision of this Agreement. 11.12 AMENDMENT OR WAIVER. (a) Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or... -
Page 298
... available to the public, (b) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation... -
Page 299
all persons the structure and tax aspects (within the meaning of Sections 6011 and 6111 of the Code and the regulations promulgated thereunder), subject to applicable U.S. federal and state securities laws, of the Transaction and all materials of any kind (including, without limitation, opinions or ... -
Page 300
... a counterpart of this Agreement to be duly executed and delivered as of the date first above written. FAIRPOINT COMMUNICATIONS, INC. By /s/ Timothy W. Henry Title: Vice President of Finance DEUTSCHE BANK TRUST COMPANY AMERICAS, Individually and as Administrative Agent By /s/ Anca Trifan Title... -
Page 301
... SEQUILS-CUMBERLAND I, LTD. By: Deerfield Capital Management LLC as Collateral Manager By /s/ Mark E. Wittnebel Name: Mark E. Wittnebel Title: Senior Vice President ROSEMONT CLO, LTD. By: Deerfield Capital Management LLC as Collateral Manager By /s/ Mark E. Wittnebel Name: Mark E. Wittnebel... -
Page 302
... Ann E. Morris Title: Assistant Vice President THE TRAVELERS INSURANCE COMPANY By /s/ Allen Cantrell Name: Allen Cantrell Title: Investment Officer CITIGROUP INVESTMENTS CORPORATE LOAN FUND INC. By: Travelers Asset Management International Company LLC By /s/ Allen Cantrell Name: Allen Cantrell... -
Page 303
... By: Pacific Investment Management Company LLC, as its Investment ...Agreement to be duly executed and delivered as of the date first above written. ARES Leveraged Investment Fund II, L.P. By: Its: ARES Management II. L.P. General Partner By /s/ Jeff Moore Name: Jeff Moore Title: Vice President... -
Page 304
... LOANS REVOLVING A TENIO LOAN C TERM LOANS-C TERM LOANS COMMITMENT COMMITMENT FLOATING RATE FIXED RATE Deutsche Bank Trust Company Americas Bank Of America, N.A. Wachovia Bank, N.A. CREDIT SUISSE FIRST BOSTON CITICORP NORTH AMERICA. INC. CIT Lending Services Corporation Co-Bank ACB Ares Leveraged... -
Page 305
... ADDRESSES ANNEX III SUBSIDIARIES A. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD COMMUNICATIONS, INC.) 1. Class A Common Stock Kelso Equity Partners V, L.P. Kelso Investment Associates V, L.P. JED Communications Associates, Inc. Meyer Haberman Susan Haberman Haberman Family Investments LLC Meyer... -
Page 306
...DLJ Private Equity Partners Fund, L.P. Greenwich Street Capital Partners II, L.P. GSCP Offshore Fund, L.P. 173,060 161,000 14,740 413,600 681,100 14,200 ANNEX III page 3 Greenwich Fund, L.P. Greenwich Street Employees Fund, L.P. TRV Executives Fund, L.P. Magnetite Asset Investors LLC Colnvestment... -
Page 307
B. FAIRPOINT BROADBAND. INC. (f/k/a MJD HOLDINGS CORP.) - 3,000 shares of Common Stock, par value $ .01 per share, authorized; 100 shares issued and outstanding. FairPoint Communications, Inc. - 100 shares Morehead Place, 521 E. Morehead Street, Suite 250, Charlotte, North Carolina 28202 C. ST ... -
Page 308
...., Morehead Place, 521 E. Morehead Street, Suite 250, Charlotte, North Carolina 28202: ANNEX III page 5 SIDNEY TELEPHONE COMPANY - 100,000 shares of Common Stock, par value $.01 per share, authorized; 100 common shares issued and outstanding. ELLENSBURG TELEPHONE COMPANY - 50,000 shares of Common... -
Page 309
...7 FairPoint Communications, Inc. - 100 shares Morehead Place, 521 E. Morehead Street, Suite 250, Charlotte, North Carolina 28202 O. MARIANNA TEL. INC. -100 shares of Common Stock, par value $10 per share authorized; 100 shares issued and outstanding. Marianna and Scenery Hill Telephone Company - 100... -
Page 310
.... FairPoint Communications, Inc. - 100 shares Morehead Place, 521 F. Morehead Street, Suite 250, Charlotte, North Carolina 28202 U. All of the issued and outstanding stock of the following entities is held by C-R Communications, Inc., 106 N. 6th Street, Cornell, Illinois 61319: C-R TELEPHONE COMPANY... -
Page 311
.... MAINE TELEPHONE COMPANY - 100,000 shares of Common Stock, par value $.01 per share, authorized; 100 shares issued and outstanding. ANNEX III page 10 UI LONG DISTANCE, INC. - 100,000 shares of Common Stock, par value $.01 per share, authorized; 100 shares issued and outstanding. UT COMMUNICATIONS... -
Page 312
... Chautauqua and Erie Telephone Corporation, 30 Main Street, Westfield, New York 14787: CHAUTAUQUA & ERIE COMMUNICATIONS. INC. (f/k/a CHAUTAUQUA & ERIE TECHNOLOGIES. INC.) - 200 shares of Common Stock, no par value, authorized; 110 shares issued and outstanding. CHAUTAUQUA & ERIE NETWORK. INC. - 200... -
Page 313
... Employers for Telephone Service Co. STE/NE Acquisition Corp. Pension Plan for Vermont Employees of Transferred GTE Operations Retirement Plan for Employees of the Ellensburg Telephone Company Chautauqua and Erie Telephone Corporation Management Pension Plan Chautauqua and Erie Telephone Corporation... -
Page 314
... Telephone Company, Inc. on a PRO RATA basis. B. ARRANGEMENTS REQUIRING FAIRPOINT COMMUNICATIONS, INC. AND/OR THE SUBSIDIARIES TO ISSUE OR SELL CAPITAL STOCK OR OTHER EQUITY INTERESTS 1. There are currently outstanding 592,460 nonqualified stock options to executives and members of management... -
Page 315
... limitation, commercial paper and certificates of deposit. FairPoint Communications, Inc. has ownership in CoBank in the form of a Class B Participation Certificate in the amount of $4,902,757. MJD Ventures, Inc. holds Patronage Capital Certificates in Rural Telephone Finance Corporation in the... -
Page 316
... Communications of Central Illinois, L.L.C., an Illinois limited liability company, engaged in the operation of cable television properties. C-R Long Distance, Inc. owns one share of stock in Associated Network Partners, Inc. ("ANPI"), an Illinois corporation that was formed by a group of Illinois... -
Page 317
... Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), as Administrative Agent for the Lenders party to the Credit Agreement referred to below 31 West 52nd Street New York, New York 10019 Attention:_____ Ladies and Gentlemen: The undersigned, FairPoint Communications, Inc. (f/k/a MJD... -
Page 318
..., FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), hereby promises to pay to the order of_____ (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office (as defined in the Agreement... -
Page 319
..., FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), hereby promises to pay to the order of_____ (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office (as defined in the Agreement... -
Page 320
...York FOR VALUE RECEIVED, FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), hereby promises to pay to the order of CoBank, ACB (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office... -
Page 321
.... THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.) By Name: Title: SCHEDULE I [COBANK TO PROVIDE] EXHIBIT B-4 FORM OF RF NOTE $_____... -
Page 322
..., FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), hereby promises to pay to the order of _____ (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office (as defined in the Agreement... -
Page 323
... Agent, the Syndication Agent, the Documentation Agent and the Lenders party to the Credit Agreement referred to below Re: Credit Agreement, dated as of March 30, 1998 and amended and restated as of March 6, 2003 (as so amended and restated, the "CREDIT AGREEMENT"), among FairPoint Communications... -
Page 324
... federal law of the United States of America and the law of the State of New York. Very truly yours, White & Case LLP EXHIBIT E FORM OF OFFICER'S CERTIFICATE I, the undersigned, [President][Vice President] of FairPoint Communications, Inc. (f/k/a MJD Communications, Inc.), a corporation organized... -
Page 325
... company agreement or equivalent organizational document of each Credit Party which are in full force and effect on the date hereof, together with ---------(1) Insert a date prior to the time of any action relating to the Credit Documents (2) Include name, office and signature of each officer... -
Page 326
... I have hereunto set my hand this 6th day of March, 2003. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.) By Name: Title: EXHIBIT E Page 4 I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby certify that: 1. [Name of Person making above certifications] is... -
Page 327
...made by [name of Person making above certifications] on behalf of the Company in Items 2, 3, 4, 5 and 18 above are true and correct. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of March, 2003. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.) By Name: Title: EXHIBIT... -
Page 328
... Letters of Credit for the account of the Borrower under the Credit Agreement and the entering into of Interest Rate Agreements and, accordingly, desires to execute this Guaranty in order to satisfy the conditions described in the preceding paragraph and to induce the Lenders to continue and/or make... -
Page 329
... upon or without any terms or conditions and in whole or in part: (i) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew or alter, any of the Guaranteed Obligations, any security therefor, or any liability incurred directly or indirectly in respect... -
Page 330
... of the Borrower or any of its Subsidiaries or the officers, directors, partners or agents acting or purporting to act on its behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 9. Any indebtedness of the Borrower now... -
Page 331
...aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Creditors may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor... -
Page 332
... New York Debtor and Creditor Law) and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term shall mean and include any "Event of Default" as defined in the Credit Agreement or any payment default under any Secured Interest Rate... -
Page 333
...TO PRINCIPLES OF CONFLICT OF LAWS. Any legal action or proceeding with respect to this Guaranty or any other Credit Document may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, and, by execution and delivery of this Guaranty... -
Page 334
... Agent or the Collateral Agent for the benefit of the Creditors upon the terms of this Guaranty and the Pledge Agreement. The Creditors further agree that this Guaranty may not be enforced against any director, officer or employee of any Guarantor. 24. This Guaranty may be executed in any number... -
Page 335
... to be executed and delivered as of the date first above written. c/o FAIRPOINT COMMUNICATIONS, INC. 521 East Morehead Street Suite 250 Charlotte, NC 28202 FAIRPOINT BROADBAND, INC., as a Guarantor By Title: c/o FAIRPOINT COMMUNICATIONS, INC. 521 East Morehead Street Suite 250 Charlotte, NC 28202... -
Page 336
... including the date hereof, the "ORIGINAL PLEDGE AGREEMENT"); WHEREAS, it is a condition precedent to the making and/or continuation of Loans and the issuance and/or continuation of Letters or Credit under the Credit Agreement that each Pledgor shall have executed and delivered to the Pledgee this... -
Page 337
...(as defined below) or the enforcement of this Agreement, after an Event of Default (such term, as used in this Agreement, shall mean any Event of Default under the Credit Agreement or any payment default by the Borrower under any Secured Interest Rate Agreement after the expiration of any applicable... -
Page 338
... mean any Foreign Corporation, limited liability company or partnership organized under the laws of a jurisdiction other than the United States or any State or Territory thereof that, in any such case, is treated as a corporation or an association taxable as a corporation for U.S. Federal income... -
Page 339
...the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof. "UNCERTIFICATED SECURITY" shall have the meaning given such term in Section 8-102(a)(18) of the UCC. 3. PLEDGE OF SECURITIES, ETC. 3.1 PLEDGE. To secure the Obligations now or hereafter owed or... -
Page 340
...under any partnership agreement or limited liability company agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to the Partnership Interest and/or Membership Interest, including any power to terminate, cancel or modify any... -
Page 341
... or Membership Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Pledgee thereof and shall promptly take (x) all actions required... -
Page 342
... Commercial Code as in effect in the various relevant States, covering all Collateral hereunder (with the form of such financing statements to be satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee's security interest in all Investment Property... -
Page 343
..., is listed on Annex A hereto; (b) the Stock held by such Pledgor consists of the number and type of shares of the stock of the corporations as described in Annex B hereto; (c) such Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as set forth... -
Page 344
... or any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, including, without limitation, all the rights and remedies of a secured party upon default under the Uniform Commercial Code of the State of New York, and the Pledgee... -
Page 345
...be under any obligation to take any action whatsoever with regard thereto. 8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee provided for in this Agreement or any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative... -
Page 346
... hereunder shall be made to the paying agent under the applicable Secured Interest Rate Agreement or, in the case of Secured Interest Rate Agreements without a paying agent, directly to the applicable Interest Rate Creditor. (d) For purposes of applying payments received in accordance with this... -
Page 347
..., are only those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Section 10 of the Credit Agreement. 14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage... -
Page 348
..., hypothecation, security interest, charge, option or other encumbrance whatsoever, except (x) the liens and security interests created by this Agreement and (y) liens permitted by Section 7.03(a) of the Credit Agreement; EXHIBIT G Page 15 (ii) it has full power, authority and legal right to... -
Page 349
... any property which is now or hereafter may be included in the Collateral and such Pledgor will not, without the prior written consent of the Pledgee, execute and, until the Termination Date (as hereinafter defined), there will not ever be on file in any public office, any enforceable financing... -
Page 350
... or pursue or take any action which may, directly or indirectly, cause a dissolution or liquidation of or with respect to any Pledged Partnership or Pledged LLC or seek a partition of any property of any Pledged Partnership or Pledged LLC, except as permitted by the Credit Agreement; (xvi) as of the... -
Page 351
qualification or compliance under any Federal or state securities law or laws to be effected with respect to all or any part of the Pledged Stock, such Pledgor as soon as practicable and at its expense will use its best efforts to cause such registration to be effected (and be kept ... -
Page 352
... partnership or limited liability company pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, "TERMINATION DATE" shall mean the date upon which the Total Commitment and all Secured Interest Rate Agreements have been terminated, no Note under the Credit Agreement is outstanding (and all... -
Page 353
...above to the party required to give notice hereunder. 20. WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Pledgee (with the consent of the Required Lenders or, to the extent... -
Page 354
... OF CONFLICT OF LAWS. Any legal action or proceeding with respect to this Agreement or any other Credit Document may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each NSG... -
Page 355
... and (y) zero; and (iii) the "NET WORTH" of each Subsidiary Pledgor shall mean the amount by which the fair salable value of such Subsidiary Pledgor's assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but without giving... -
Page 356
... and the Pledgee have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. Address: 521 East Morehead Street, Suite 250 Charlotte, NC 28202 FAIRPOINT COMMUNICATIONS, INC (f/k/a MJD Communications, Inc.), as a Pledgor By Title... -
Page 357
Address: c/o Fairpoint Communications, Inc. 521 East Morehead Street, Suite 250 Charlotte, NC 28202 ST ENTERPRISES, LTD. as a Pledgor By ------------------------------------Title: Address: c/o Fairpoint Communications, Inc. 521 East Morehead Street, Suite 250 Charlotte, NC 28202 MJD HOLDINGS, ... -
Page 358
...: Address: c/o Fairpoint Communications, Inc. 521 East Morehead Street, Suite 250 Charlotte, NC 28202 UTILITIES, INC., as a Pledgor By Title: Accepted and Agreed to: DEUTSCHE BANK TRUST COMPANY AMERICAS (f/k/a Bankers Trust Company) as Collateral Agent and Pledgee By Name: Title: ANNEX A LIST... -
Page 359
.... Union Telephone Company of Hartford WMW Cable TV Co. Yates City Telephone Company D. FAIRPOINT BROADBAND, INC. (f/k/a MJD HOLDINGS CORP.) ANNEX B LIST OF PLEDGED STOCK I. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD COMMUNICATIONS, INC.)(3) Name of Issuing Corporation 1. FairPoint Broadband, Inc... -
Page 360
...MJD SERVICES CORP. Name of Issuing Corporation 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bluestem Telephone Company Big Sandy Telecom, Inc. Odin Telephone Exchange, Inc. Kadoka Telephone Company Columbine Telecom Company Ravenswood Communications, Inc. Armour Independent Telephone Co. Union Telephone Company... -
Page 361
... Resources, Inc. ST Long Distance, Inc. Type of Shares ------Common Common Common Common Common Number of Shares --------684 1000 100 500 100 Percentage Owned ---------99.7% 100% 100% 100% 100% D. C-R COMMUNICATIONS, INC. Name of Issuing Corporation 1. C-R Telephone Company Type of Shares... -
Page 362
.... Joe Communications, Inc. Type of Shares ------Common Number of Shares --------1,000 Percentage Owned ---------100% H. COMERCO, INC. Name of Issuing Corporation 1. YCOM Networks, Inc. Type of Shares ------Common Number of Shares --------294 Percentage Owned ---------100% ANNEX C LIST OF... -
Page 363
... other agreement governing the Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests consisting of capital stock of a corporation are fully paid and nonassessable. 4. All notices, statements of accounts, reports, prospectuses, financial statements and other communications to... -
Page 364
... of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor. 8. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without... -
Page 365
...: Title: EXHIBIT H OFFICER'S SOLVENCY CERTIFICATE To the Agents and each of the Lenders party to the Credit Agreement referred to below: I, the undersigned, the Chief Financial Officer of FairPoint Communications, Inc. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), do... -
Page 366
... if the assets of the Borrower and its Subsidiaries taken as a whole are sold with reasonable promptness in an arm's-length transaction under present conditions for the sale of comparable business enterprises. (c) "NEW FINANCING" The Indebtedness incurred or to be incurred by the Borrower and its... -
Page 367
...Identified Contingent Liabilities to the extent reflected in Stated Liabilities) have been considered (after giving effect to the consummation of the Transaction and the incurrence of all financings in connection therewith) in making the certification set forth in paragraph 4 below, and with respect... -
Page 368
... hereto set my hand this 6th day of March, 2003. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.) Name: Title: By accepting this certificate, the Administrative Agent acknowledges, on its own behalf and on the behalf of the Lenders from time to time party to the Credit Agreement... -
Page 369
... with the Credit Agreement or the other Credit Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or the other Credit Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation... -
Page 370
..., C Term Loans-Floating Rate, C Term Loans-Fixed Rate and/or RF Loans which are outstanding on the Settlement Date, net of any closing costs. The Assignor and the Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Settlement Date directly... -
Page 371
... BANK TRUST COMPANY AMERICAS as Administrative Agent By Title: FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), as Borrower By Title:](10) ---------(10) The consent of the Administrative Agent and, so long as no Default under Section 8.01 or 8.05 of the Credit Agreement or Event... -
Page 372
...) The Borrower and the Administrative Agent shall direct the entire amount of the interest to the Assignee at the rate set forth in Section 1.08 of the Credit Agreement, with the Assignor and the Assignee effecting any agreed upon sharing of interest through payments by the Assignee to the Assignor... -
Page 373
...and the Administrative Agent shall direct the entire amount of the Commitment Commission to the Assignee at the rate set forth in Section 2.01(a) of the Credit Agreement, with the Assignor and the Assignee effecting any agreed upon sharing of the Commitment Commission through payment by the Assignee... -
Page 374
... Company Americas (f/k/a Bankers Trust Company), as Administrative Agent under the Credit Agreement referred to below 31 West 52nd Street New York, New York 10019 Attention: _____ [Insert Name and Address of Letter of Credit Issuer](14) Ladies and Gentlemen: The undersigned, FairPoint Communications... -
Page 375
...hereto. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.) By Name: Title: -------(15) Insert name and address of beneficiary. (16) Insert description of the supported obligations, name of agreement and/or the commercial transaction to which this Letter of Credit Request relates. (17... -
Page 376
... Letters of Credit for the account of the Borrower under the Credit Agreement and the entering into of Interest Rate Agreements and, accordingly, desires to execute this Guaranty in order to satisfy the conditions described in the preceding paragraph and to induce the Lenders to continue and/or make... -
Page 377
... prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of (a) the principal of and interest on the Notes issued by, and the Loans made to, the Borrower under the Credit Agreement and all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit... -
Page 378
... upon or without any terms or conditions and in whole or in part: (i) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew or alter, any of the Guaranteed Obligations, any security therefor, or any liability incurred directly or indirectly in respect... -
Page 379
... action in any circumstances without notice or demand. It is not necessary for any Creditor to inquire into the capacity or powers of the Borrower or any of its Subsidiaries or the officers, directors, partners or agents acting or purporting to act on its behalf, and any indebtedness made or created... -
Page 380
... 11.01 of the Credit Agreement, all reasonable out-of-pocket costs and expenses (including, without limitation, the reasonable fees and disbursements of counsel) of each Creditor in connection with the enforcement of this Guaranty and of the Administrative Agent in connection with any amendment... -
Page 381
... New York Debtor and Creditor Law) and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term shall mean and include any "Event of Default" as defined in the Credit Agreement or any payment default under any Secured Interest Rate... -
Page 382
...this Guaranty as provided above. As used in this Guaranty, "Termination Date" shall mean the date upon which the Total Commitment and all Secured Interest Rate Agreements have been terminated, no Note or Letter of Credit under the Credit Agreement is outstanding (and all Loans have been paid in full... -
Page 383
... WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first written above. c/o FAIRPOINT COMMUNICATIONS, INC. 521 East Morehead Street Suite 250 Charlotte, NC 28202 FAIRPOINT BROADBAND, INC., as a Guarantor By /s/ Timothy W. Henry Title: MJD VENTURES... -
Page 384
...Timothy W. Henry Title: ST ENTERPRISES LTD. as a Guarantor By /s/ Timothy W. Henry Title: 11 c/o FAIRPOINT COMMUNICATIONS, INC. 521 East Morehead Street Suite 250 Charlotte, NC 28202 Accepted and Agreed to: DEUTSCHE BANK TRUST COMPANY AMERICAS as Administrative Agent for the Lenders By /s/ Anca... -
Page 385
... including the date hereof, the "ORIGINAL PLEDGE AGREEMENT"); WHEREAS, it is a condition precedent to the making and/or continuation of Loans and the issuance and/or continuation of Letters or Credit under the Credit Agreement that each Pledgor shall have executed and delivered to the Pledgee this... -
Page 386
...(as defined below) or the enforcement of this Agreement, after an Event of Default (such term, as used in this Agreement, shall mean any Event of Default under the Credit Agreement or any payment default by the Borrower under any Secured Interest Rate Agreement after the expiration of any applicable... -
Page 387
... mean any Foreign Corporation, limited liability company or partnership organized under the laws of a jurisdiction other than the United States or any State or Territory thereof that, in any such case, is treated as a corporation or an association taxable as a corporation for U.S. Federal income... -
Page 388
...the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof. "UNCERTIFICATED SECURITY" shall have the meaning given such term in Section 8-102(a)(18) of the UCC. 3. PLEDGE OF SECURITIES, ETC. 3.1 PLEDGE. To secure the Obligations now or hereafter owed or... -
Page 389
...under any partnership agreement or limited liability company agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to the Partnership Interest and/or Membership Interest, including any power to terminate, cancel or modify any... -
Page 390
... or Membership Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Pledgee thereof and shall promptly take (x) all actions required... -
Page 391
..., is listed on Annex A hereto; (b) the Stock held by such Pledgor consists of the number and type of shares of the stock of the corporations as described in Annex B hereto; (c) such Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as set forth... -
Page 392
... Pledgee shall also be entitled to receive directly, and to retain as part of the Collateral: (i) all other or additional stock, notes, membership interests, partnership interests or other securities or property (other than cash) paid or distributed by way of dividend or otherwise in respect of the... -
Page 393
... or any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, including, without limitation, all the rights and remedies of a secured party upon default under the Uniform Commercial Code of the State of New York, and the Pledgee... -
Page 394
... the termination of this Agreement pursuant to Section 18 hereof, to the relevant Pledgor or, to the extent directed by such Pledgor or a court of competent jurisdiction, to whomever may be lawfully entitled to receive such surplus. (b) For purposes of this Agreement, "PRO RATA SHARE" shall mean... -
Page 395
...hereunder shall be made to the paying agent under the applicable Secured Interest Rate Agreement or, in the case of Secured Interest Rate Agreements without a paying agent, directly to the applicable Interest Rate Creditor. -12- (d) For purposes of applying payments received in accordance with this... -
Page 396
... lien, mortgage, hypothecation, security interest, charge, option or other encumbrance whatsoever, except (x) the liens and security interests created by this Agreement and (y) liens permitted by Section 7.03(a) of the Credit Agreement; (ii) it has full power, authority and legal right to pledge all... -
Page 397
...by this Agreement; (vi) all the shares of the Stock have been duly and validly issued, are fully paid and non-assessable and are subject to no options to purchase or similar rights; (vii) each of the Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid... -
Page 398
... pursue or take any action which may, directly or indirectly, cause a dissolution or liquidation of or with respect to any Pledged Partnership or -16- Pledged LLC or seek a partition of any property of any Pledged Partnership or Pledged LLC, except as permitted by the Credit Agreement; (xvi) as of... -
Page 399
...Secured Debt Agreements, or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (ii) any waiver, consent, extension, indulgence or other action... Federal or state securities law or laws to be effected with respect to all or any part of the Pledged Stock... -
Page 400
... partnership or limited liability company pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, "TERMINATION DATE" shall mean the date upon which the Total Commitment and all Secured Interest Rate Agreements have been terminated, no Note under the Credit Agreement is outstanding (and all... -
Page 401
... Company Americas 31 West 52nd Street New York, New York 10019 Attention: [ ] Tel: [_____] Fax: [_____] (iii) if to any Bank Creditor (other than the Pledgee), either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement or (y) at such address... -
Page 402
... OF CONFLICT OF LAWS. Any legal action or proceeding with respect to this Agreement or any other Credit Document may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each NSG... -
Page 403
... (c) Each Pledgor and the Pledgee hereby irrevocably waive all right to a trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement, the other Credit Documents or the transactions contemplated hereby or thereby. 24. ADDITIONAL PLEDGORS. It is understood and... -
Page 404
... given to the Collateral Agent not less than 10 days' prior written notice of each change to its legal name, its type of organization, whether or not it is a Registered Organization, -23- its jurisdiction of organization, its Location, its organizational identification number (if any), and whether... -
Page 405
...and the Pledgee have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. Address: 521 East Morehead Street, Suite 250 Charlotte, NC 28202 FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), as a Pledgor By: /s/ Timothy... -
Page 406
... Title: Address: c/o Fairpoint Communications, Inc. 521 East Morehead Street, Suite 250 Charlotte, NC 28202 UTILITIES, INC., as a Pledgor By: /s/ Timothy W. Henry Title: -26- Accepted and Agreed to: DEUTSCHE BANK TRUST COMPANY AMERICAS, (f/k/a Bankers Trust Company) as Collateral Agent and... -
Page 407
... Company Sidney Telephone Company Utilities, Inc. a. b. c. Standish Telephone Company China Telephone Company Maine Telephone Company 12. 13. 14. 15. 16. Telephone Service Company Chouteau Telephone Company Chautauqua and Erie Telephone Corporation The Orwell Telephone Company GTC Communications... -
Page 408
...WMW Cable TV Co. Yates City Telephone Company FAIRPOINT BROADBAND, INC. (f/k/a MJD HOLDINGS CORP.) -29- ANNEX B LIST OF PLEDGED STOCK I. FAIRPOINT COMMUNICATIONS, INC. (F/K/A MJD COMMUNICATIONS, INC.)(1) Name of Issuing Corporation ----------1. 2. 3. A. Fairpoint Broadband, Inc. MJD Services Corp... -
Page 409
(1) FairPoint Communications, Inc. stock will not be pledged. (2) Of the 101 shares issued and outstanding, 5.7143 are held in treasury. (3) MJD Services Corp. owns 100% of the Common Stock issued and outstanding; however, of the 200 shares of Preferred Stock issued and outstanding, Union Telephone ... -
Page 410
4. 5. D. ST Computer Resources, Inc. ST Long Distance, Inc. C-R COMMUNICATIONS, INC. Common Common 500 100 100% 100% Name of Issuing Corporation ----------1. E. C-R Telephone Company UTILITIES, INC. Type of Shares ------Common Number of Shares --------100 Percentage Owned ---------100% Name... -
Page 411
H. COMERCO, INC. Name of Issuing Corporation ----------1. YCOM Networks, Inc. Type of Shares ------Common Number of Shares --------294 Percentage Owned ---------100% ANNEX C LIST OF NOTES None. ANNEX D PART I LIST OF MEMBERSHIP INTERESTS A. None. PART II LIST OF MEMBERSHIP INTERESTS A. None.... -
Page 412
... other agreement governing the Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests consisting of capital stock of a corporation are fully paid and nonassessable. 4. All notices, statements of accounts, reports, prospectuses, financial statements and other communications to... -
Page 413
... of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor. 8. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without... -
Page 414
but solely as Collateral Agent and Pledgee By Name: Title: [_____], as the Issuer By Name: Title: -
Page 415
... 10.5 EXECUTION FIRST AMENDMENT TO CREDIT AGREEMENT FIRST AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT"), dated as of March 6, 2003, among FAIRPOINT CARRIER SERVICES, INC. (formerly known as FairPoint Communications Solutions Corp., a Delaware corporation (the "BORROWER"); the Credit Parties... -
Page 416
..." shall mean, for purposes of this Agreement and the Preferred Stock Issuance and Capital Contribution Agreement, with respect to any Loan of a Lender, any of the following: (i) the failure of the Borrower to pay any amount due with respect to such Loan (including principal, interest, Fees and other... -
Page 417
...of the Credit Agreement is hereby further amended by adding at the end thereof the following paragraph: "Notwithstanding anything in this Section 10 to the contrary, no Lender shall exercise any remedy available to it in any way (other than the Conversion Option) with respect to its Loans, or direct... -
Page 418
... assignment pursuant to Section 12.04) and, other than as set forth in Section 12.13 of the Existing Credit Agreement, the rights and obligations of such First Amendment Non-Continuing Lender under this Agreement shall be terminated on and as of the First Amendment Effective Date.". B. SUBSTITUTION... -
Page 419
... set forth in this Amendment, each of the undersigned hereby acknowledges and agrees that the execution and delivery by any Agent and the Lenders of this Amendment shall not be deemed (i) to create a course of dealing or otherwise obligate any Agent or the Lenders to execute similar agreements... -
Page 420
... fee otherwise required to be paid to Administrative Agent under Section 12.04(b) of the Credit Agreement, with respect to each of the BofA Assignment (as defined below) and the CSFB Assignment (as defined below) (and any assignments from THL Affiliate to THL Fund IV Bridge Corp.). G. CONDITIONS... -
Page 421
... future under or in connection with the Credit Agreement or any other agreement or instrument referred to therein. Each of the Agents and the Lenders hereby expressly reserves all such rights and remedies. 3. This Amendment may be executed in any number of counterparts and by the different parties... -
Page 422
...this Amendment to be duly executed and delivered as of the date first above written. CREDIT PARTIES: FAIRPOINT CARRIER SERVICES, INC. By: /s/ Timothy W. Henry Name: Timothy W. Henry Title: Vice President of Finance FAIRPOINT COMMUNICATIONS SOLUTIONS CORP. - NEW YORK (for purposes of Section C only... -
Page 423
... East Morehead Street, Suite 250 Charlotte, North Carolina 28202 Re: FAIRPOINT COMMUNICATIONS, INC. SERIES A PREFERRED STOCK Ladies and Gentlemen: Reference is made to (i) the Certificate of Designation of FairPoint Communications, Inc., a Delaware corporation (the "Company"), relating to its Series... -
Page 424
... in the Dividend Rate during the Reduced Dividend Period contemplated by this Letter Agreement. (e) This Letter Agreement has been duly authorized, executed and delivered by the undersigned. (f) This Letter Agreement shall be governed by and construed in all respects under the laws of the State of... -
Page 425
...- Virginia) FairPoint Communications Solutions Corp. - New York (f/k/a FairPoint Communications Corp. - New York) Choice One Communications Inc. FairPoint Carrier Services, Inc., f/k/a FairPoint Communications Solutions Corp. FairPoint Carrier Services, Inc., f/k/a FairPoint Communications Solutions... -
Page 426
..., FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), hereby promises to pay to the order of _____ (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office (as defined in the Agreement... -
Page 427
..., FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), hereby promises to pay to the order of _____ (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office (as defined in the Agreement... -
Page 428
..., FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "Borrower"), hereby promises to pay to the order of _____ (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office (as defined in the Agreement... -
Page 429
... any kind in connection with this Note. SECTION 6. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.) By Name: Title: -
Page 430
..., FAIRPOINT COMMUNICATIONS, INC. (f/k/a MJD Communications, Inc.), a Delaware corporation (the "BORROWER"), hereby promises to pay to the order of _____ (the "LENDER"), in lawful money of the United States of America in immediately available funds, at the Payment Office (as defined in the Agreement... -
Page 431
... Street Suited 250 Charlotte, NC 28202 November 21, 2002 John P. Duda President FairPoint Communications, Inc. 521 East Morehead Street, Suite 250 Charlotte, North Carolina 28202 Dear John: This letter agreement shall supplement and modify your Employment Agreement with FairPoint Communications... -
Page 432
... (12) months, plus all accrued and unpaid base salary and benefits as of the date of termination. In addition, the Company shall maintain your long-term disability, term life insurance and medical benefits described in Section 2(b)(iv) of the Employment Agreement for a period of twelve (12) months... -
Page 433
..., North Carolina 28031 Dear Peter: Congratulations on your promotion to Chief Operating Officer of FairPoint Communications, Inc. (the "Company"). As a member of the Company's senior management team, you are entitled to certain severance benefits should your employment be terminated by the Company... -
Page 434
... failure to comply with applicable laws or governmental regulations within the scope of Executive's employment. For purposes of the Agreement, "without Cause" shall mean a termination by the Company of the Executive's employment for any reason other than a termination based upon Cause, death or... -
Page 435
...: Pursuant to your offer letter from FairPoint Communications, Inc. (the "Company") dated September 1, 2000 (the "Agreement"), a copy of which is attached, you are eligible for certain severance benefits should your employment be terminated by the Company without Cause, all as set forth in the... -
Page 436
... EXECUTINE OFFICER OF FAIRPOINT COMMUNICATIONS, INC. HAS THE AUTHORITY TO ENTER INTO ANY AGREEMENT FOR EMPLOYMENT OR BENEFITS FOR ANY SPECIFIC PERIOD OF TIME, OR MAKE ANY AGREEMENT CONTRARY TO THE FOREGOING. If you agree to accept this employment offer, please sign and date this letter and return... -
Page 437
... within the scope of employment as defined by this Agreement. For purposes of the Agreement, "without Cause" shall mean a termination by the Company of the Executive's employment for any reason other than a termination based upon Cause, death, Disability or upon a Change of Control, as defined... -
Page 438
... 10.36 EMPLOYMENT AGREEMENT This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of December 31, 2002 (the "Effective Date") by and between FAIRPOINT COMMUNICATIONS, INC., a Delaware corporation (together with its successors and assigns permitted hereunder, the "Company"), and... -
Page 439
... other health related bills of Executive and his spouse not covered by the Company's health insurance plans. In addition, the Executive shall be entitled to payment of long term disability and term life insurance premiums in an amount not to exceed $10,000 in the aggregate annually. (v) PERQUISITES... -
Page 440
.... For purposes of this Agreement, at any time the Company or any of its affiliates sponsors a long-term disability plan for the Company's employees, "Disability" shall mean disability as defined in such long-term disability plan. The determination of whether the Executive has a Disability shall be... -
Page 441
...to compete set forth in Section 6 hereof. In addition, the Company shall maintain the Executive's long term disability and term life insurance premiums (as provided in Section 2(b)(iv)) for such period. (d) In the event that the Executive's employment as Chief Executive Officer of the Company and as... -
Page 442
... service lines (DSL), broadband, voice or video conferencing, voice mail services, voice, data or video transmissions, cellular or wireless telephone, data, paging or Internet access services, prepaid calling cards and other prepaid communication services, electronic mail services, directory... -
Page 443
...Telecommunications Industry are competitive with each other (for example, cable television providers, telephone companies and ISPs all compete with each other to provide Internet access and services to consumers and businesses), (iv) the business of investing in and operating RLECs, ILECs, CLECs and... -
Page 444
...simultaneously sent by registered or certified mail, postage prepaid), as follows (or to such other address as shall be set forth in a notice given in the same manner): If to the Company, to: FairPoint Communications, Inc. 521 East Morehead Street, Suite 250 Charlotte, North Carolina 28202 Facsimile... -
Page 445
... but not limited to Executive's employment agreement with the Company dated January 1, 2002. (i) EXECUTIVE'S LEGAL FEES. The reasonable costs and expenses for legal services incurred by Executive in the negotiation and execution of this Agreement shall be paid by the Company. 10 IN WITNESS WHEREOF... -
Page 446
...Illinois New York New York New York New York New York New York Washington Washington Maine Maine Maine Maine Maine Maine Maine Inc. Maine Telephone Service Company Chouteau Telephone Company Chouteau Telecommunications & Electronics, Inc. Chautauqua and Erie Telephone Corporation C&E Communications... -
Page 447
...Telephone Company of Hartford Union TelNET, Inc. WMW Cable TV Co. Yates City Telephone Company FAIRPOINT CARRIER SERVICES, INC. (f/k/a FAIRPOINT COMMUNICATIONS SOLUTIONS CORP.) FairPoint Communications Solutions Corp. - New York FairPoint Communications Solutions Corp. - Virginia FAIRPOINT BROADBAND... -
Page 448
... 6-12 1 INDEPENDENT AUDITORS' REPORT To the Partners of Orange County - Poughkeepsie Limited Partnership We have audited the accompanying balance sheets of Orange County - Poughkeepsie Limited Partnership (the "Partnership") as of December 31, 2002 and 2001, and the related statements of operations... -
Page 449
... years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP New York, New York February 25, 2003 ORANGE COUNTY - POUGHKEEPSIE LIMITED PARTNERSHIP BALANCE SHEETS DECEMBER 31, 2002 AND 2001 (Dollars in Thousands ASSETS... -
Page 450
... COUNTY - POUGHKEEPSIE LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2002 AND 2001 (Dollars in Thousands 2002 OPERATING REVENUE: Service revenue OPERATING COSTS AND EXPENSES: Cost of service General and administrative Depreciation and amortization 2001 $114,591 $ 81,952... -
Page 451
NYNEX MOBILE LIMITED PARTNERSHIP 2 -------BALANCE, JANUARY 1, 2001 Net income Distribution to partners $ 41,277 57,138 (59,500) -------38,915 46,092 (25,500) (59,507) -------$ 0 ======== VERIZON WIRELESS OF THE EAST LP 36,671 (42,500) 59,507 -------$ 53,678 ======== TACONIC TELEPHONE CORPORATION ... -
Page 452
...Poughkeepsie, New York service areas. The partners and their respective ownership percentages as of December 31, 2002 are as follows: Managing and general partner: Verizon Wireless of the East LP* Limited partners: Taconic Telephone Corporation ("Taconic") Warwick Valley Telephone Company ("Warwick... -
Page 453
... expenses include direct and allocated charges of salary and employee benefit costs for the services provided to the Partnership. The Partnership believes such allocations are reasonable. In 2002 the Partnership has classified all site rentals and network related salaries as cost of service. The... -
Page 454
... on the expected collectibility of accounts receivable. The general partner relies on local and long-distance telephone companies, some of whom are related parties, and other companies to provide certain communication services. Although management believes alternative telecommunications facilities... -
Page 455
... rate which was approximately 5.5% and 4.6% at December 31, 2002 and 2001, respectively. Included in Other Income, Net is net interest income related to the Due from General Partner balance of $1,553 and $1,167 for the years ended December 31, 2002 and 2001, respectively. RECENTLY ISSUED ACCOUNTING... -
Page 456
..., includes the following: Capitalized network engineering costs of $466 and $112 were recorded during the years ended December 31, 2002 and 2001 respectively. Construction-in-progress included in certain of the classifications shown above, principally wireless plant equipment, amounted to $2,373 and... -
Page 457
... partnership disputes, and claims involving relations with resellers and agents. Various consumer class action lawsuits allege that the Cellco breached contracts with consumers, violated certain state consumer protection laws and other statutes and defrauded customers through concealed or misleading... -
Page 458
..., Cellco is subject to various other legal actions and claims in the normal course of business. While Cellco's legal counsel cannot give assurance as to the outcome of each of these matters, in management's opinion, based on the advice of such legal counsel, the ultimate liability with respect... -
Page 459
... CURRENT ASSETS Property, plant and equipment, net Deferred charges and other assets, net TOTAL ASSETS $ 2,259 1,112 22,475 107 ------25,953 24,753 7 ------$50,713 ======= LIABILITIES AND PARTNERS' CAPITAL Current liabilities Accounts payable and accrued liabilities Advance billings TOTAL CURRENT... -
Page 460
... GENERAL PARTNER NYNEX Mobile Limited Partnership 2 BALANCE AT DECEMBER 31, 1999 Net income Distribution to partners BALANCE AT DECEMBER 31, 2000 $ 32,862 38,165 (29,750) -------$ 41,277 ======== LIMITED PARTNERS Warwick Taconic Valley Telephone Telephone Corporation Company 2,899 3,368 (2,625... -
Page 461
... Loss on disposition of plant and equipment Changes in certain assets and liabilities: Accounts receivable Unbilled revenue Prepaid expenses and other current assets Deferred charges and other assets Accounts payable and accrued liabilities Advanced billings Net cash provided by operating activities... -
Page 462
... business as Verizon Wireless. On June 30, 2000, Bell Atlantic and GTE Corporation ("GTE Corp.") completed a merger of equals under a definitive merger agreement entered into on July 27, 1998. On June 30, 2000, the newly merged entity changed its name to Verizon Communication, Inc. ("Verizon... -
Page 463
... Telephone Switching Offices (MTSOs) and cell sites. The cost of property, plant and equipment is depreciated over its estimated useful life, using the straight-line method of accounting. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the related... -
Page 464
... balance at December 31, 2000. The Partnership maintains an allowance for losses based on the expected collectibility of accounts receivable. The managing partner relies on local and long-distance telephone companies and other companies to provide certain communication services. Although management... -
Page 465
... 381 38,747 (13,994) $ 24,753 Accumulated depreciation Property, plant and equipment, net Property, plant and equipment includes the following: Capitalized network engineering costs of $176 were recorded during the year ended December 31, 2000. Construction-in-progress included in certain of the... -
Page 466
..., partnership disputes, and claims involving relations with resellers and agents. Various consumer class actions lawsuits allege that Cellco breached contracts with consumers, violated certain state consumer protection laws and other statutes and defrauded customers through concealed or misleading... -
Page 467
..., Cellco is subject to various other legal actions and claims in the normal course of business. While Cellco's legal counsel cannot give assurance as to the outcome of each of these matters, in management's opinion, based on the advice of such legal counsel, the ultimate liability with respect... -
Page 468
... for direct incremental costs related to wireless customer activations on January 1, 2002. In addition, as discussed in Note 2, the Company changed the method by which it accounts for activation fees charged with the sale of equipment and service as a result of the adoption of Emerging Issues Task... -
Page 469
... part of these financial statements. -2- UNITED STTTES CELLULTR TELEPHONE OF GRETTER TULST, L.L.C. STTTEMENT OF OPERTTIONS FOR THE NETR ENDED DECEMBER 31, 2002 Revenues...Expenses: Cost of equipment sold...System operations...Marketing and selling...General and administrative...Depreciation... -
Page 470
... by operating activities: Depreciation...Change in accounts receivable...Change in inventory...Change in accounts payable and accrued expenses...Change in deferred revenues and deferred credits...Change in customer deposits...Change in other deferred charges...Change in other assets and liabilities... -
Page 471
...Partnership to provide cellular telephone service in the Oklahoma Rural Service Trea ("RST") No. 6. On May 31, 1995, North Carolina RST #4, Inc. ("NC RST 4") contributed all its right, title, and interest in the Oklahoma RST No. 4 ("OK RST 4") Federal Communications Commission wireline authorization... -
Page 472
... Secretary of State on December 31, 1997. -6- UNITED STTTES CELLULTR TELEPHONE OF GRETTER TULST, L.L.C. NOTES TO FINTNCITL STTTEMENTS, CONTINUED The members and their respective interests at December 31, 2002 are: TGP...USCOC of Tulsa...ICTLLC...NC RST 4...1.01% 48.93% 44.45% 5.61% Profits and... -
Page 473
... of amounts owed by customers for both service provided and equipment sales, by affiliated entities, and by other cellular carriers as a result of these carriers' customers using the Company's cellular system. CELLULTR TELEPHONE INVENTORN: Inventory is stated at the lower of cost or market with... -
Page 474
...of charges to customers for monthly access, cellular airtime usage, roamer charges, equipment sales, toll charges and vertical services. The Company recognizes revenues as services are rendered. Revenues earned but unbilled at December 31, 2002 were $1,057,901 and are included in accounts receivable... -
Page 475
... Company expenses advertising costs as incurred. Tdvertising costs totaled $4,189,271 for the year ended December 31, 2002. PENSION PLTN: Employees, who manage the daily operations of the Company, are eligible for Telephone and Data Systems, Inc. Wireless Companies' Pension Plan (the "Pension Plan... -
Page 476
... approximates its fair value. 6. CONCENTRTTION OF CREDIT RISK: The Company provides cellular service and sells cellular telephones to a diversified group of consumers within a concentrated geographical area. The Company performs credit evaluations of the Company's customers and requires deposits... -
Page 477
... included in system operations expense. The Company earned net switching revenue of $218,311 from certain affiliates of USCC during 2002. Tlso during 2002, the Company repaid long term debt owed to USCC totaling $1,615,250. Total interest expense related to affiliated debt balances was $1,538,239 in... -
Page 478
... payable - affiliate Current maturities of long-term debt - affiliate Deferred revenues and customer deposits Other current liabilities Total current liabilities Deferred revenues and other deferred credits Total liabilities Members' equity Total liabilities and members' equity $ 5,558,638 3,635,434... -
Page 479
...: Depreciation and amortization Gain on disposal Change in accounts receivable Change in inventory Change in accounts payable and accrued expenses Change in deferred revenues, deferred credits and customer deposits Change in other deferred charges Change in other assets and liabilities Net cash... -
Page 480
...Partnership to provide cellular telephone service in the Oklahoma Rural Service Trea ("RST") NO. 6. On May 31, 1995, North Carolina RST #4, Inc. ("NC RST 4") contributed all its right, title, and interest in the Oklahoma RST No. 4 ("OK RST 4") Federal Communications Commission wireline authorization... -
Page 481
... to customers for monthly access, cellular airtime and data usage, roamer revenue (inbound and outbound), equipment sales, long distance charges and vertical services. The Company recognizes service revenues as rendered. Tctivation and reconnection fees are recognized over average customer service... -
Page 482
... fee revenues are recognized ratably over customer service periods averaging 48 months and 6 months, respectively. PENSION PLTN - Employees, who manage the daily operations of the Company, are eligible for Telephone and Data Systems, Inc. Wireless Companies' Pension Plan (the "Pension Plan... -
Page 483
... - Inventories consist of cellular telephone equipment and are stated at the lower of cost or market, with cost determined on a first-in, first-out basis. l. m. (3) LETSE COMMITMENTS: The Company leases office locations, cell site locations and retail locations under operating leases. Rent... -
Page 484
... rate based on the Commercial Paper Rate. (6) LONG TERM DEBT - TFFILITTE: Since 1991, USCC entered into agreements with Northern Telecom Finance Corporation ("NTFC") that included a commitment by NTFC to finance equipment purchases made and construction costs incurred by certain entities managed... -
Page 485
also provided administrative and other services to certain affiliates of USCC which resulted in net billings to those affiliates of $1,595,239 during 2001. Management believes that all affiliated expenses, costs, and revenues applicable to the Company are representative of what they would have been ... -
Page 486
... Current maturities of long-term debt - affiliate Deferred revenues and customer deposits Other current liabilities Total current liabilities Deferred revenues and other deferred credits Long-term debt - affiliate Total liabilities Members' equity Total liabilities and members' equity $ 86,720,433... -
Page 487
... CTSH FLOWS FROM FINTNCING TCTIVITIES: Change in notes payable-affiliate Change in long-term debt-affiliate Capital distributions Net cash required for financing activities CTSH FLOWS FROM INVESTING TCTIVITIES: Net additions to property, plant and equipment Net cash required for investing activities... -
Page 488
...Partnership to provide cellular telephone service in the Oklahoma Rural Service Trea ("RST") NO. 6. On May 31, 1995, North Carolina RST #4, Inc. ("NC RST 4") contributed all its right, title, and interest in the Oklahoma RST No. 4 ("OK RST 4") Federal Communications Commission wireline authorization... -
Page 489
... to customers for monthly access, cellular airtime and data usage, roamer revenue (inbound and outbound), equipment sales, long distance charges and vertical services. The Company recognizes service revenues as rendered. Tctivation and reconnection fees are recognized over average customer service... -
Page 490
... fee revenues are recognized ratably over customer service periods averaging 48 months and 6 months, respectively. PENSION PLTN - Employees, who manage the daily operations of the Company, are eligible for Telephone and Data Systems, Inc. Wireless Companies' Pension Plan (the "Pension Plan... -
Page 491
... No. 101 "Revenue Recognition in Financial Statements," issued by the Securities and Exchange Commission. Under the new accounting method, the Company defers recognition of certain activation and reactivation fees. The cumulative effect of this change for periods prior to January 1, 2000 of $962... -
Page 492
... rate based on the Commercial Paper Rate. (6) LONG TERM DEBT - TFFILITTE: Since 1991, USCC entered into agreements with Northern Telecom Finance Corporation ("NTFC") that included a commitment by NTFC to finance equipment purchases made and construction costs incurred by certain entities managed... -
Page 493
.... Credit losses related to customers have been within management's expectations. (8) TRTNSTCTIONS WITH RELTTED PTRTIES: USCC and certain affiliates of TDS provide the Company with centralized management, accounting, customer service, consulting and computer services which resulted in net billings to... -
Page 494
... in the United States of America. KIESLING ASSOCIATES LLP Madison, Wisconsin March 1, 2003 - 1 - ILLINOIS VALLEY CELLULAR RSA 2-1 PARTNERSHIP BALANCE SHEETS DECEMBER 31, 2002 AND 2001 2002 ASSETS CURRENT ASSETS Cash and cash equivalents Accounts receivable Due from customers Less allowance of... -
Page 495
... TOTAL ASSETS ILLINOIS VALLEY CELLULAR RSA 2-1 PARTNERSHIP BALANCE SHEETS DECEMBER 31, 2002 AND 2001 LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES Current portion of long-term debt Capital lease obligation Notes Payable 2002 21,287 1,000,000 2001 659,340 - Accounts Payable: Trade... -
Page 496
...OPERATING INCOME OTHER INCOME (EXPENSES) Interest expense Interest during construction Other, net 362,421 43,862) 9,534 13,... statements. - 3 - ILLINOIS VALLEY CELLULAR RSA 2-I PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL DECEMBER 31, 2002, 2001, AND 2000 Total Balance at December 31, 1999 Net... -
Page 497
... service within a portion of the Illinois RSA 2 Cellular Geographic Service Area. At December 31, 2002, 2001, and 2000, the general partners and their respective ownership percentages in the Partnership were as follows: Partner Verizon Wireless CENCOMM, Inc. C-R Cellular, Inc. DePue Communications... -
Page 498
... upon delivery of the equipment to the customer. The Partnership generates revenue from charges to its customers when they use their cellular phones in other wireless providers' markets. Until 2002, the Partnership included this revenue on a net basis in cost of services in its statement of... -
Page 499
... home service areas. Under these types of plans, amounts charged to the Partnership by other wireless providers may not necessarily be passed through to its customers. In 2002, the Partnership adopted a policy to include these revenues as retail revenue rather than cost of services on a net basis... -
Page 500
...and $146,109 at December 31, 2002 and 2001, respectively, of Rural Telephone Finance Cooperative (RTFC) subordinated capital certificates (SCC). Such SCC's were purchased from RTFC as a condition of obtaining long-term financing for the Partnership and are carried at cost. The SCC's are non-interest... -
Page 501
...the Partnership is required, under the loan agreement, to achieve a debt service coverage ratio of not less than 1.25. - 10 - ILLINOIS VALLEY CELLULAR RSA 2-I PARTNERSHIP NOTES TO FINANCIAL STATEMENTS NOTE 6. LONG-TERM DEBT (Continued) Of the funds available under the RTFC approved loans, including... -
Page 502
... credit to cellular customers located primarily within its portion of the Illinois RSA 2 cellular geographic service area, to other cellular carriers, and to other telecommunications carriers. The Partnership maintains its cash in bank deposit accounts which, at times, may exceed federally insured... -
Page 503
... operating costs. The agreement includes an option to extend the lease for an additional five years. Rental expense for all cancelable and non-cancelable operating leases totaled $199,503, $139,150, and $114,856 in 2002, 2001, and 2000, respectively. NOTE 10. ALLOWANCE FOR UNCOLLECTIBLES The Company... -
Page 504
... seasonal variations in customer calling patterns and timing of promotional activities. NOTE 12. RECENT ACCOUNTING DEVELOPMENTS In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 143, "Accounting for Asset Retirement Obligations... -
Page 505
... in the United States of America. KIESLING ASSOCIATES LLP Madison, Wisconsin March 1, 2003 - 1 - ILLINOIS VALLEY CELLULAR RSA 2-III PARTNERSHIP BALANCE SHEETS DECEMBER 31, 2002 AND 2001 2002 ASSETS CURRENT ASSETS Cash and cash equivalents Accounts receivable: Due from customers Less allowance of... -
Page 506
...ILLINOIS VALLEY CELLULAR RSA 2-III PARTNERSHIP BALANCE SHEETS DECEMBER 31, 2002 AND 2001 2002 LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES Current portion of long-term debt Capital lease obligation Notes payable Accounts payable: Trade Affiliates Other Accrued commissions Advance billings... -
Page 507
...) Interest expense Interest during construction Other, net NET INCOME The accompanying notes are an integral part of these financial statements. - 3 - ILLINOIS VALLEY CELLULAR RSA 2-III PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL DECEMBER 31, 2002, 2001, AND 2000 Total Balance at December 31... -
Page 508
... Geographic Service Area. At December 31, 2002, 2001, and 2000, the general partners and their respective ownership percentages in the Partnership were as follows: Partner Illinois SMSA Limited Partnership Chicago SMSA Limited Partnership CENCOMM, Inc. C-R Cellular, Inc. DePue Communications, Inc... -
Page 509
... for electronic mobile exchange and base site controller equipment; 7 years for furniture and fixtures; and 5 years for computer equipment. When depreciable properties are sold, or otherwise disposed of, any resulting gains or losses are included in the determination of income. LONG-LIVED ASSETS... -
Page 510
...larger home service areas. Under these types of plans, amounts charged to the Partnership by other wireless providers may not necessarily be passed through to its customers. In 2002, the Partnership adopted a policy to include the revenue as retail revenue rather than cost of services on a net basis... -
Page 511
ILLINOIS VALLEY CELLULAR RSA 2-III PARTNERSHIP NOTES TO THE FINANCIAL STATEMENTS NOTE 3. PROPERTY AND EQUIPMENT The components of property and equipment were as follows: 2002 Land and Land improvements Buildings Electronic mobile exchange and base site controller equipment Cell site towers and ... -
Page 512
... of issue and expiring by 2002. The interest rate on the debt is a variable rate established periodically by the RTFC. The rate at December 3, 2001, was 5.3%. Substantially all assets of the Partnership are pledged as security under the mortgage and security agreement with the RTFC. - 10 - ILLINOIS... -
Page 513
... credit to cellular customers located primarily within its portion of the Illinois RSA 2 cellular geographic service area, to other cellular carriers, and to other telecommunications carriers. The Partnership maintains its cash in bank deposit accounts which, at times, may exceed federally insured... -
Page 514
... of base operating costs. The agreement includes an option to extend the lease for an additional five years. Rental expense for all cancelable and non-cancelable operating leases totaled $122,319, $95,515, and $90,900 in 2002, 2001, and 2000, respectively. - 13 ILLINOIS VALLEY CELLULAR RSA 2-III... -
Page 515
... seasonal variations in customer calling patterns and timing of promotional activities. - 14 - NOTE 12. RECENT ACCOUNTING DEVELOPMENTS In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 143, "Accounting for Asset Retirement... -
Page 516
The Partnership has not yet determined the impact the adoption of these Standards will have on its financial position, results of operations, and cash flows. - 15 -