FairPoint Communications 2005 Annual Report Download - page 84

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interests of any subsidiary that is an operating company will be required to provide the collateral described above.
The credit facility contains customary events of default, including but not limited to, failure to pay principal, interest or other amounts when due, breach
of covenants or representations, cross-defaults to certain other indebtedness in excess of specified amounts, judgment defaults in excess of specified amounts,
certain ERISA defaults, the failure of any guaranty or security document supporting the credit facility and certain events of bankruptcy and insolvency.
(b) 1998 Senior Secured Notes
On March 30, 1998, the Company closed a $315 million senior secured credit facility (the Credit Facility) which committed $75 million of term debt
(tranche C) amortized over 9 years, $155 million of term debt (tranche B) amortized over 8 years, and $85 million of reducing revolving credit facility debt
with a term of 6.5 years. On March 14, 2000, an additional $165 million reducing revolving credit facility with a term of 4.5 years was committed and made
available to the Company under the Credit Facility. The Credit Facility required that the Company maintain certain financial covenants.
The credit facility was amended and restated as part of a refinancing completed on March 6, 2003. The amended and restated credit facility provides for,
among other things, rescheduled amortization and an excess cash flow sweep with respect to the tranche C term facility. The amended and restated credit
facility consisted of term loan facilities (consisting of tranche A loans and tranche C loans) in an aggregate principal amount of $156.4 million and a
revolving credit facility in an aggregate principal amount of $70.0 million. All of the Company’s obligations under the credit facility were unconditionally and
irrevocably guaranteed jointly and severally by four of its mid-tier subsidiaries. Outstanding debt under the amended and restated credit facility was secured
by a first priority perfected security interest in all of the capital stock of certain of the Company’s subsidiaries.
On January 30, 2004, the Company amended its amended and restated credit facility to increase its revolving loan facility from $70.0 million to
$85.0 million and its tranche A term loan facility from $30.0 million to $40.0 million. The Company used all of the additional borrowing under the tranche A
term loan facility and a portion of the borrowings under the revolving loan facility to repay in full all of the indebtedness under the Carrier Services’ senior
secured notes. There was no gain or loss on the extinguishment of this indebtedness.
The 1998 Senior Secured Notes were repaid in full in 2005 using proceeds from the Company’s initial public offering and borrowings under the 2005
Senior Secured Notes.
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