FairPoint Communications 2006 Annual Report Download - page 51

Our credit facility consists of a revolving facility, or the revolver, in a total principal amount of up to $100.0 million, of which $83.7 million was
available at March 1, 2007 and a term loan facility, or the term loan, in a total principal amount of $588.5 million with $588.5 million outstanding at
March 1, 2007. The term loan matures in February 2012 and the revolver matures in February 2011. The revolver has a swingline subfacility in an amount of
$5.0 million and a letter of credit subfacility in an amount of $10.0 million, which will allow issuances of standby letters of credit for our account.
Borrowings under our revolver bear interest, at our option, at either (i) the Eurodollar rate plus 2.0% or (ii) a base rate, as such term is defined in the credit
agreement, plus 1.0%. Effective on September 30, 2005, the Company amended its credit facility to reduce the effective interest rate margins on the $588.5
million term loan by 0.25% to 1.75% on Eurodollar loans and to 0.75% for Base rate loans.
On January 25, 2007, we entered into an amendment to our credit facility that is intended to facilitate certain transactions related to the Merger. Among
other things, such amendment: (i) permits us to consummate the sale of our interest in Orange County-Poughkeepsie Limited Partnership and retain the
proceeds thereof up to an amount equal to $55 million; (ii) excludes the gain on the sale of our interest in Orange County-Poughkeepsie Limited Partnership
from the “Available Cash”, (iii) amends the definition of “Adjusted Consolidated EBITDA” to allow for certain one-time add-backs to the calculation
thereof for operating expenses incurred in connection with the Merger; (iv) amends the definition of “Consolidated Capital Expenditures” to exclude certain
expenditures incurred by us in connection with transition and integration expenses prior to consummation of the Merger; and (v) increases the leverage
covenant and dividend suspension test to 5.50:1.00 and 5.25:1.00, respectively.
The credit facility contains financial covenants, including, without limitation, the following tests: a minimum interest coverage ratio equal to or greater
than 3.0:1 and a maximum leverage ratio equal to or less than 5.50:1. The credit facility contains customary affirmative covenants. The credit facility also
contains negative covenants and restrictions, including, among others, with respect to redeeming and repurchasing our other indebtedness, loans and
investments, additional indebtedness, liens, capital expenditures, changes in the nature of our business, mergers, acquisitions, asset sales and transactions
with affiliates. Subject to certain limitations set forth in the credit facility, we may use all of our Cumulative Distributable Cash (as defined in the credit
facility) accumulated after April 1, 2005 to declare and pay dividends, but we may not in general pay dividends in excess of such amount. On March 11,
2005, April 29, 2005 and September 14, 2005, we entered into technical amendments to our credit facility.
Our credit facility requires us first to prepay outstanding term loans under the credit facility and, thereafter, to repay loans under the revolver and/or to
reduce revolver commitments (or commitments under the delayed draw facility) under the credit facility with, subject to certain conditions and exceptions,
100% of the net cash proceeds we receive from any sale, transfer or other disposition of any assets, 100% of net casualty insurance proceeds and 100% of the
net cash proceeds we receive from the issuance of permitted securities and, at certain times if we are not permitted to pay dividends, with 50% of the increase
in our cumulative distributable cash during the prior fiscal quarter. Reductions to the revolving commitments under the credit facility from the foregoing
recapture events will not reduce the revolving commitments under the credit facility below $50.0 million. Our credit facility provides for voluntary
prepayments of the revolver and the term loan and voluntary commitment reductions of the revolver (and the delayed draw facility), subject to giving proper
notice and compensating the lenders for standard Eurodollar breakage costs, if applicable.
Our old credit facility consisted of an $85.0 million revolving loan facility, of which $45.0 million was available at December 31, 2004, and two term
facilities, a tranche A term loan facility of $40.0 million with $40.0 million outstanding at December 31, 2004 that was to mature on March 31, 2007 and a
tranche C term loan facility with $102.4 million outstanding as of December 31, 2004 that was to mature on March 31, 2007. We repaid all of the borrowings
under our old credit facility with a portion of net proceeds from our initial public offering together with borrowings under our credit facility.
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