FairPoint Communications 2006 Annual Report Download - page 82

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The credit facility provides for payment to the lenders of a commitment fee on any unused commitments equal to 0.5% per annum, payable quarterly in
arrears, as well as other fees.
On January 25, 2007, the Company entered into an amendment to its credit facility which is intended to facilitate certain transactions related to the
Merger. Among other things, such amendment: (i) permits the Company to consummate the sale of its 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 the Company 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 requires certain mandatory prepayments, including first to prepay outstanding term loans under the credit facility and, thereafter, to
repay loans under the revolving facility and/or to reduce revolving facility commitments with, subject to certain conditions and exceptions, 100% of the net
cash proceeds the Company receives from any sale, transfer or other disposition of any assets, 100% of net casualty insurance proceeds and 100% of the net
cash proceeds the Company receives from the issuance of permitted securities and, at certain times if the Company is not permitted to pay dividends, with
50% of the increase in the Company’s Cumulative Distributable Cash (as defined in the credit facility) 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.
The credit facility provides for voluntary prepayments of the revolving facility and the term facility and voluntary commitment reductions of the
revolving facility, subject to giving proper notice and compensating the lenders for standard Eurodollar breakage costs, if applicable.
The credit facility requires that the Company maintain certain financial covenants. The credit facility contains customary affirmative 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 also contains negative covenants and restrictions, including, among others, with respect to redeeming and repurchasing other
indebtedness, loans and investments, additional indebtedness, liens, capital expenditures, changes in the nature of the Company’s business, mergers,
acquisitions, asset sales and transactions with the Company’s affiliates. The credit facility restricts the Company’s ability to declare and pay dividends on its
common stock as follows:
· The Company may use all of its available cash accumulated after April 1, 2005 plus certain incremental funds to pay dividends, but may not in
general pay dividends in excess of such amount. “Available cash” is defined in the credit facility as Adjusted EBITDA (a) minus (i) interest expense,
(ii) repayments of indebtedness other than repayments of the revolving facility (unless funded by debt or equity), (iii) consolidated capital expenditures
(unless funded by long-term debt, equity or the proceeds from asset sales or insurance recovery events), (iv) cash taxes, (v) cash consideration paid
for acquisitions (unless funded by debt or equity), (vi) cash paid to make certain investments, and (vii) certain non-cash items excluded from
Adjusted EBITDA and paid in cash and (b) plus (i) the cash amount of extraordinary gains and gains on sales of assets and (ii) certain non-cash
items excluded from Adjusted EBITDA and received in cash. “Adjusted EBITDA” is defined in the
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