FairPoint Communications 2003 Annual Report Download - page 22

indebtedness of the Company. The proceeds from the offering of the 117/8% notes and borrowings under the credit facility's tranche A term
loan facility were used to: (i) repay the entire amount of all loans outstanding under the Company's then outstanding credit facility's revolving
facility, acquisition facility and tranche B term loan facility; (ii) repurchase $13.3 million aggregate liquidation preference of our series A
preferred stock (together with accrued and unpaid dividends thereon) at 65% of its liquidation preference; (iii) repurchase $9.8 million
aggregate principal amount of the Company's outstanding 91/2% notes (together with accrued and unpaid interest thereon) for approximately
$7.9 million; (iv) repurchase $7.0 million aggregate principal amount of the Company's outstanding 121/2% notes (together with accrued
and unpaid interest thereon) for approximately $6.1 million; (v) make a capital contribution of approximately $1.5 million to Carrier Services,
which used these proceeds to retire a portion of its debt; and (vi) pay transaction fees.
For a summary description of our debt, see "—Description of Certain Indebtedness."
In May 2002, Carrier Services entered into an amended and restated credit facility with its lenders to restructure its obligations under its
credit facility. In the restructuring, (i) Carrier Services paid certain of its lenders $5.0 million to satisfy $7.0 million of obligations under the
credit facility, (ii) the lenders converted approximately $93.9 million of the loans under the credit facility into shares of the Company's
series A preferred stock and (iii) the remaining loans under the credit facility and certain swap obligations were converted into $27.9 million of
new term loans. In March 2003, the Company used a portion of the proceeds from the offering of the 11 7/8% notes and borrowings under the
credit facility's tranche A term loan facility to repay $2.2 million principal amount of loans under the Carrier Services credit facility, at
approximately a 30% discount to par. On January 30, 2004, the Company used additional borrowings under its credit facility's tranche A
term loan facility and a portion of the borrowings under its credit facility's revolving loan facility to repay in full all indebtedness under the
Carrier Services credit facility.
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The Company's series A preferred stock is non-voting, except as required by applicable law, and is not convertible into common stock of
the Company. The series A preferred stock provides for the payment of dividends at a rate equal to 17.428% per annum. 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 redeem the series A preferred stock at any time. The redemption price for such shares is payable in cash in an
amount equal to $1,000 per share plus any accrued but unpaid dividends thereon, which we refer to as the preference amount. Under certain
circumstances, the Company would be required to pay a premium of up to 6% of the preference amount in connection with the redemption of
the series A preferred stock. In addition, upon the occurrence of certain events, such as (i) a merger, consolidation, sale, transfer or
disposition of at least 50% of the assets or business of the Company and its subsidiaries, (ii) a public offering of the Company's common
stock which yields in the aggregate at least $175.0 million, or (iii) the first anniversary of the maturity of the 12 1/2% notes (which first
anniversary will occur in May 2011), unless prohibited by its credit facility or by the indentures governing its 9 1/2% notes, floating rate notes
and 121/2% notes, the Company would be required to redeem all outstanding shares of the series A preferred stock at a price per share equal
to the preference amount. Certain holders of the series A preferred stock have agreed with the Company to reduce the dividend rate payable
on the shares they hold for a period of two years. In March 2003, the Company used a portion of the proceeds from the offering of the 117/8%
notes and borrowings under the credit facility's tranche A term loan facility to repurchase $13.3 million aggregate liquidation preference of the
series A preferred stock.
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The tables set forth below contain information with regard to disclosures about contractual obligations and commercial commitments.
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The following table discloses aggregate information about our contractual obligations as of December 31, 2003 and the periods in which
payments are due:
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
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

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
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
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

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
Contractual obligations:
Debt maturing within one year $21,982 $21,982 — — —
Long term debt 803,578 — 69,710 312,319 421,549
Preferred shares subject to mandatory
redemption(1) 96,699 — — — 96,699
Capital leases — — — — —
Operating leases(2) 12,863 5,428 5,073 1,749 613
Deferred transaction fee(3) 8,445 — — — 8,445
Common stock subject to put options 2,136 1,000 1,136 — —